Debt Review Loans

Can You Get a Loan While You Are Under Debt Review

If you are looking for a personal loan or to get car finance while you are under administration or debt review you may find it difficult to find a lender willing to grant you such credit.

Can You Get a Loan If You Are Under Debt Review

You probably will not be successful if you apply for credit from the main stream banks simply because they would be in contravention of the National Credit Act & therefore against the law to grant loans or to provide additional finance to anyone who is currently under going debt counselling.

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.

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 successfull.

5 Benefits of Going Under the Debt Review Process

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 Can You Get Out Of a Debt Review?

It 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 clearnce 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 intallments & 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 Loans

Debt 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.