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Getting credit while under debt review is not easy. Fortunately there are lenders who specialize in providing loans for under debt review clients.
Most main stream banks will not grant you a loan while under debt review due to the NCA. However less reputable lenders will not mind contravening the NCA.
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There are a number of reasons that one becomes over-indebted. Some of them are avoidable, like retrenching or an increase in the cost of living, while others are unavoidable, such as getting divorced or gambling problems. However, whatever the reason, it is very important to be financially responsible & make sure you are not adding to your debt. In order to do so, you need to consider all the options available to you. One option is Debt Review, which is a legal process to help you manage your finances effectively & become financially stable again.
Can you get a loan while under Debt Review? Yes, you can apply for a credit package while under Debt Review but it is very important to understand what is involved in the process before applying. This is because if you do not meet the requirements, your creditors may terminate your Debt Review & proceed with legal action. This will also have a negative impact on your credit score.
You should only apply for a debt consolidation loan if you have been under Debt Review for more than 12 months & have been able to pay off at least 50% of your total debt. This is because the debt counselling process is designed to help you rehabilitate your financial position & taking on additional debt will have a negative impact on this.
While it is possible to get a loan while under Debt Review, you should only do so with a reputable lender who is registered with the National Credit Regulator (NCR) & loan without payslip offers loans for debt review clients with reasonable terms & interest rates. Otherwise, you are more likely to end up dealing with unscrupulous loan sharks who will take advantage of your desperate financial situation.
Once you have successfully paid off your debt under Debt Review, your debt counsellor will issue you with a clearance certificate, which must be sent to all your creditors & credit bureaus. The credit bureaus will then remove the ‘under debt review’ flag from your profile & you can start borrowing again. It is very important to only take on additional debt once you have exited the debt review process. This will ensure that you do not relapse into your previous poor financial habits & go back into debt. This could have disastrous consequences for you & your family. The only way to achieve lasting financial freedom is by learning how to budget & manage your money effectively. This will not only protect you against credit related stress but will also improve your quality of life. There are many ways that you can do this, but it starts with making a commitment to yourself & your family.
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While you’re under debt review you are legally prohibited from obtaining further credit or finance in terms of the NCA (National Credit Act). This means that main stream lenders and financial institutions will not grant you a loan. However, there are lenders who will provide loans for clients under debt review – but it is important to note that this type of credit comes with high interest rates and unreasonable repayment terms.
These types of lenders are called “loan sharks” and they have no qualms about breaking the law to capitalise on desperate people who are struggling to manage their finances. They will often make their advances as payday loans, meaning that they will be deducted from the borrower’s salary on each pay day. This will leave them with very little money to pay their other creditors or for basic living expenses. In addition to this, they may also subject the debtor to all sorts of verbal & sometimes physical threats if the debtor fails to keep up with repayments.
The intention of debt review is to help debtors to get a handle on their indebtedness and to reschedule their payments. In addition, it is hoped that a debtor will be able to stop creditors from harassing them and threatening legal action. If a debtor’s situation is dire, it could be a good idea to apply for a sequestration order, but this process can be expensive and the debtor will not be able to use their home as collateral – making it an out of reach option for many.
For this reason, it is best to avoid taking out any new debt until you have been issued with a clearance certificate by your Debt Counsellor. This usually takes about 60 months. Once you’ve cleared all your outstanding debt, the Debt Counsellor will instruct the credit bureaus to remove the debt counselling notation from your record & then you can apply for responsible new credit. However, in the meantime it’s important to practice sound financial discipline, save where you can & not spend beyond your means. This will go a long way towards helping you to avoid having to resort to the services of a loan shark.