Debt Review Loans

 Debt Review Loans

For anyone who is under review it is unlikely that you will be successful when applying for debt review loans from any of the mainstream banks or lending institutions.

This is simply because granting loans to people under debt review would place the banks in contravention of the National Credit Act & this would therefore be against the law to grant such a loan or to provide additional finance to anyone who is currently under review.

Whilst the best option would be to avoid committing to extra debt & making your financial situation even worse, it is sometimes unavoidable & there are, however, certain options available to you to apply for a loan while under review one of which would be to end the review process or to approach a non-mainstream lender.

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Loans for People Under Debt Review

Loans While Under Debt ReviewSo getting loans for people under debt review or debt review clients (or to secure car finance while under review) may find it difficult to find a lender willing to grant such a loan.

However, you will always find a lender willing to grant you credit in such circumstances but you would be well advised to examine the loan conditions carefully and to especially take note of the interest rate being charged before signing & committing to such a loan as it could place you in a far worse financial situation.

It is also worthwhile checking to ensure that the lender is registered with the NCR (National Credit Regulator) which would provide some protection as opposed to some of the unscrupulous lenders out there.

It is also worth mentioning that you would have to settle all your existing debt before being able to successfully apply for further credit from any mainstream bank or credit provider, however this would not necessarlity be the case with other more “flexible” lenders.

Furthermore, once your debt has been cleared & the debt review process completed, it is important to ensure that your ITC record is clear so that you will have a clean credit record & future credit applications will be successful.

5 Benefits of Going Under Debt Review

Benefits of Debt Review Process

This process does however offer certain benefits for people who are in a situation where they are totally overwhelmed by their debts & are being hard pressed by their creditors to make payments that they cannot afford.

Undergoing a debt review may therefore be a lifeline for you because of the following reasons (however you do need to make informed decisions when discussing this process with your counsellor);

  1. Once you have been placed under debt review you are conferred with certain legal rights pertaining to your financial situation which, for instance, prohibits your creditors from taking legal action against you for a period of 60 days.
  2. In terms of paying off all of your creditors you will be required to only make one consolidated payment per month towards paying off all of your debt.
  3. The monthly payment can be reduced by 30% to 40% which will make things more affordable although it will take significantly longer to pay off all your debt.
  4. You may also be protected in terms of having your house or motor vehicle from being re-possessed.
  5. You can gain control of your financial situation & finally see light at the end of the tunnel.

While debt review offers many benefits, the downside is that you may be forced to give up certain luxuries & show the court that you are willing to curb your spending & committed to clearing your debt.

When Does the Debt Review Process Finish?

Need a Loan But Under Debt Review

You will remain under debt review until either all your outstanding debt is totally cleared or until your financial situation is of a sufficiently stable & sound position that you will be able to apply to be removed from the debt review process.

However if you do exit the review process, you will no longer receive any protection with respect to being unable or getting into difficulty with regards to paying off your debt – so it will be unwise to pull out of the process prematurely.

So after completing the debt review process,any references to you having been under debt review should also be removed from your credit record entirely so that your debt review history will not be possible to be picked up by anyone.

How To Get Out Of a Debt Review?

Get Out Of Debt ReviewIt should be noted that you can withdraw from the process voluntarily at any time, however this does not mean that your credit record will be cleared – this will only happen once all your creditors have been paid up & your debt counsellor has issued the relevant clearance certificate.

However, for some people, their personal circumstances & financial position has changed since they went under review and therefore now want to get out of the process.

So if this is you & because you have more disposable income you think you can afford to pay all your installments & creditors, you should discuss your new financial situation with your counsellor.

Therefore if your income has improved significantly, your debt counsellor may issue a clearance certificate (in terms of the National Credit Act).

Once your clearance certificate has been issued, you can consider your debt review process to be terminated & the listing on the credit bureau to be removed.

Conclusion On Getting Loans While Under Debt Review LoansDebt Review Loans

Finally ensure that you choose a reputable debt counsellor as many consumers have realised to their detriment that a less than reliable counsellor could cause you significant losses due to their mismanagement & negligent handling of your affairs.

Also remember that as it against the law to be granted a loan while under debt review, there will be unscrupulous lenders who may be willing to grant such loans but these loans will come at a significant cost in terms of interest & stringent repayment conditions.

So notwithstanding the above, and whilst you probably won’t be successful in applying through the mainstream banks, there are however other lenders who may provide you with the credit you need at reasonable interest rates & with acceptable terms.

Go here for more information on applying for personal loans »

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