Frequently asked questions about switching and consolidating your loans

Loan consolidation is similar to restructuring your debt as it’s used to settle existing loans and combine them into a single loan. The term of your new consolidated loan can be tailored to repay the combined balance over a shorter period (faster) or a longer period (slower).

Loan consolidation also has the benefit of an updated, personalised interest rate, which means the combined balance may be paid off at a lower interest rate.

If you’re in distress, it means you’re experiencing financial pressure and can no longer pay one or more of your monthly loan repayments. If this is the case, please visit our Debt Care Centre and explore the available options.

If you’re non-distressed, it means you’re managing your finances well but want to simplify your repayments. With non-distressed loan consolidation, you may benefit from lower monthly service fees and a personalised interest rate, which can help you save in the long term.

We offer non-distressed loan consolidation through our Loan Consolidation offering.

With a consolidation loan you can save on your monthly repayments by combining up to 3 existing loans into a single payment. You can also access additional funds for a specific purpose.

If you apply for a standard term loan to settle your existing loans, you won’t benefit from reduced instalments on those loans, which may result in paying more overall.

Many of our customers benefit by applying for our Loan Consolidation, while borrowing more for a specific reason and paying less in total than they were before.

You should consider loan consolidation if you have one or more fixed-term personal loans, if your interest rates are high, or if you took out these loans with other credit providers (and therefore didn’t receive personalised pricing from us).

You may also want to consider it if you’d like to reduce your monthly repayments and if you’re paying off one or more loans from us and/or other credit providers.

Check your credit score. It can have an impact on the interest rate and loan amount you qualify for. You can check your credit score for free on the Banking App using the Credit Score add-on.

You should also review your existing loans, both from Standard Bank and other credit providers, and ensure your repayments are up to date.

Learn more about credit scores and how you can improve yours.

Yes. Credit Life Insurance is included in your Loan Consolidation and monthly repayments, so there’s no need for a separate application or additional monthly payments.

We’ll settle the consolidated loan accounts on your behalf. Your existing loan provider(s) should recognise this final payment and close the loan account. If any refunds are due, it will be paid to you by the original loan provider(s).

Some of the benefits of consolidation include:

• A single monthly payment instead of multiple payments
• Lower monthly loan repayments
• Reduced monthly service fees
• A personalised interest rate
• Zero initiation fees

Through our Loan Consolidation you can also borrow additional funds over and above what you need to settle your fixed-term loans.

On average, our customers reduce their monthly debt instalments by R1 300 per month. T&Cs apply.

Both new and existing customers over the age of 18 can apply, provided they have fixed-term loans with:

• Standard Bank
• ABSA
• African Bank
• Capfin
• Capitec
• Direct Axis
• FinChoice
• FNB
• Nedbank
• Old Mutual

Note that your loan payments with these credit providers must be up to date. 

If you’ve missed payments or are about to, visit the Debt Care Centre for more information.

You can apply for a consolidation on the Banking App, by visiting your nearest branch or by reaching out to your Banker.

You don’t need to be an existing Standard Bank customer to apply.

If you’re an existing customer, follow our step-by-step guide to learn how to apply on the app.

No, you can switch and consolidate the fixed-term loans you have with:

• Standard Bank
• ABSA
• African Bank
• Capfin
• Capitec
• Direct Axis
• FinChoice
• FNB
• Nedbank
• Old Mutual

Consolidating your loans into a single loan may improve your credit score, especially if you have multiple loans at the same time.

However, many factors influence your credit score, and other factors may have a greater impact.

Learn more about what a credit score is and how it’s calculated.

Up to 84 months (7 years).

Your maximum term is based on your credit history and relationship with the bank.

A good credit score is a sign of a good credit history, which, along with your relationship with the bank, can lead to a lower interest rate.

The term can be customised to suit your needs. For example, if you only have a year to pay off on your current loans and don’t want to pay off loans for longer than that, you can choose to only pay off your Loan Consolidation over a year too.

The total loan amount is currently capped at R300 000, but the amount you qualify for is based on your monthly surplus (your total income minus your expenses).

During your application, we’ll do an affordability assessment and automatically exclude your current loan repayments that may be settled through the consolidation.

A new debit order will be set up for your monthly payment. The agreed amount will be automatically deducted from your bank account on a monthly, bi-weekly or weekly basis.

You choose the day(s) on which you would like your debit order to be deducted from your account. It will be the same day(s) every month, and it is usually the same as your salary date.

You can also make additional payments towards your loan, allowing you to settle it faster and reduce the total interest paid over the life of your loan.

No, there are no initiation fees at this time.

Yes, you can transfer additional funds into your loan account whenever you want.

Yes, and there are no penalty fees for settling your loan early.

If you miss a payment, your loan account will go into arrears. The missed payment will need to be brought up to date and repaid along with your next scheduled payment.

If you’re struggling to make your monthly repayments, visit our Debt Care Centre for more information on how we can help you.

Interest is charged based on the outstanding balance of your loan.

The interest rate we offer is fixed for the entire term of your loan and your rate is determined by your credit score, your relationship with the bank and the current prime interest rate.

Learn more about interest rates and the how fixed and variable interest work.