Blue Oak Systems has just launched an online application called RESET which will help debt-ridden consumers to restructure their unsecured debt. The RESET principle centres around establishing the minimum consolidation loan which will yield the maximum cash savings.
With over 8 million South Africans over-indebted and debt consolidation solutions failing, it seems a little hollow to talk about encouraging a savings habit.
Theuns Hanekom, co-founder of Blue Oak Systems, believes that we cannot begin to talk about developing a savings culture in South Africa until we can show consumers how to unlock savings from debt. He feels that financial advisors are trained to operate on one side of the personal balance sheet only whereas the problem and opportunity often sits on the debt side.
“We have thousands of highly qualified financial planners in South Africa all selling retirement, investment or life products, which is right. But if they looked at the debt side of their clients’ personal balance sheets, you’d find that they could potentially improve their clients’ personal cash flow and either increase savings or as a minimum, reduce the need for clients to borrow more. I’d like to see financial advisors impacting on both sides of the personal balance sheet,” he says.
Traditionally, the thinking has been to consolidate debt through taking a maximum loan. Ironically, this doesn’t always result in achieving maximum monthly savings. The problem is that if you don’t enjoy a monthly cash flow improvement which makes a difference, sooner or later you’re going to be borrowing again until such time as you just cannot access any more loans.
Another problem in debt management is that people are not comfortable talking about debt which means they don’t access the expertise required to successfully structure debt. Hanekom believes that, provided expert and credible debt structuring applications are used, the online or web environment provides the security, subjectivity and speed required to structure debt effectively.
Hanekom says that before looking at blanket consolidation and raising optimal loans, the first option must be to find maximum savings by taking the minimal loan.
NOTES TO THE EDITOR
Theuns Hanekom has owned both mortgage origination and debt consolidation businesses before co-founding Blue Oak Systems and establishing a different approach which focuses on unlocking savings from debt through their online application RESET.
RESET is a secure, online application which provides the consumer with telling and subjective answers in a matter of minutes – the intention is to calculate the maximum amount of monthly savings that can be achieved by taking the minimal consolidating loan. The easy RESET process is as follows:
• The consumer logs in and registers, providing their identity number.
• After payment of a nominal fee online, RESET establishes the maximum monthly savings which can be achieved, based on a report from the Credit Bureau. RESET also calculates the likely loan that the consumer will be granted by their bank.
• If the savings amount is worthwhile, the consumer pays a second amount online and a detailed plan is presented which indicates (a) the minimum loan required to (b) settle the accounts which (c) will result in the greatest monthly savings. The consumer can then present this plan to
• Or, for a further fee, Blue Oak Systems will arrange the entire fulfilment A-Z.
• In some instances, the savings are negligible, but in many cases one can see an improvement in monthly cash flow from a negative situation to R10 000 or more per month.
Visit www.blueoak.co.za for more information or to access RESET.
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