We owned our home bond-free but we were forced to take out a 100 percent loan for R700 000 to fund his business and expenses. I have also built up numerous smaller debts. I'm considering taking out a personal loan to the amount of R20 000 or less in order to settle the balances on some of my accounts, thus rendering me with at least a little bit of income available each month which should hopefully bring me out of my overdraft. I know that it means that I will then be repaying a loan.

But if I calculate what it will cost me to repay this compared to what it is currently costing me per month, this looks a far better option. Does it make sense to go this route?

Secondly, I have received letters from financial institutions such as Woolworths, Clicks and Direct Axis offering these loan facilities. Which would you recommend as the most reliable and secure provider?

Answer:
It sounds like you want to consolidate a number of small loans into a single loan with a lower monthly payment.

Make sure the loan is paid off around the same time as the smaller loans would have been. Extending the term will give you a lower payment but you will end up paying more. It would be better to borrow from your access bond because the rate will be cheaper.

The institutions you mentioned are all reputable but they will still charge you a higher rate than your bond rate. If these debts belong to your husband (and you are married with an ante-nuptial contract) it may be better for you to stay away from them and encourage him to sort out the problem.

No matter how hard this may seem, you must sit down and do a budget with your husband and look for the longer-term solution. His business venture has cost you dearly and maybe it's time for a reality check. If he has not made any money after a year then maybe he needs to face the reality that he is either not cut out for entrepreneurship, or his business idea is not sound.

You can’t keep throwing good money after bad. You are now in the danger zone. If he loses any more money you could lose your house. Maybe he needs to get a part-time job while he is trying to build the business.

It is never a good idea to borrow more money to get out of debt but if you do consolidate, and you are disciplined, you may be able to make a dent in it. But the real solution at this stage is more income.