Creditors are constantly harassing many South Africans who are over-indebted and unable to meet their repayment agreements. Some creditors even threaten to take legal actions in a bid to recoup their money. But with debt review, many South Africans have found a convenient way to get out of debt without the constant harassment from creditors.
But is it possible for heavily indebted South Africans to get a loan while still under debt review? Well, the answer is pretty simple. The moment you apply for debt review, your credit profile will be flagged across different credit bureaus. With this, no responsible lender will approve a loan application as you’re currently indebted and unable to pay off all your accumulated debts.
Whenever you apply for a loan, creditors must check your credit history before processing your application. And should they be accredited by the NCA and NCR, they will outrightly reject your application once they see your current credit status.
More so, there are stringent penalties stipulated by the National Credit Act (NCA) for banks or creditors who approve loan applications for South Africans still under debt review. According to NCA stipulations, no South African under debt review is eligible for new loans until they have completed the debt review process and are certified debt-free.
Debt review and loan sharks
The debt review process operates under the National Credit Act and is enforced by the National Credit Regulator. According to the NCA, South Africans under debt review are prohibited from taking new loans. What this means is that your loan application to a registered lender will most likely be rejected on the grounds of your over-indebtedness. But if you’re able to access any loans while still under debt review, the likely answer is that you’re dealing with unregistered lenders who are mostly known as loan sharks.
The thing about loan sharks is that they don’t operate under any necessary regulations so dealing with them is a big no-no. And since they aren’t governed by the NCA or regulated by the NCR, you’ll not get the protection enjoyed under debt review. The not-so-cool part is that loan sharks offer exorbitant interest on short-term loans, leaving you to pay way more than you borrowed. And for someone who is already indebted, we are sure this doesn’t sound like a great deal.
Opting for debt review is a pretty significant decision for any South African looking to get out of debt fast. Unfortunately, it isn’t always easy for people under debt review to adjust to the current realities of spending only what they have, as the process prevents you from accessing any more credit. So there is always the temptation to want to exit debt review early and return to a life of credit in a bid to maintain a certain lifestyle.
Of course, we understand that desperation is one of the reasons why South Africans under debt review will reach out to loan sharks for new credits, but guess what, taking this path will amount to shooting yourself in the foot as you may end up putting your entire financial future at risk. So before you apply for new loans while under debt review, or exit the debt review process in a bid to access new credit, ask yourself if it is worth it.
Lofty promises for quick fixes: Dealing with greedy sales representatives
Every now and then, South Africans under debt review are approached by sales representatives, who offer them dicey deals provided they are willing to exit their debt review process. But given our years of experience in this industry, we know that such advice is counterproductive and will end up backfiring. More so, these sales representatives are not acting according to the dictates of the NCA or NCR and are usually in it for the commissions they earn.
Since they aren’t liable or aware of all the legal implications, you may end up suffering the consequences of your decisions. By exiting debt review early and taking up more credits, you’re effectively opening yourself to more debt you may never be able to break free from.
Debt review and credit provider collections agent
When you’re in debt review, you may constantly have to deal with credit provider collection agents who sometimes work for external collections attorneys. Sometimes, they may genuinely ask you how you plan on dealing with existing debt and may even offer you a better repayment deal with a reduced monthly repayment amount.
Unfortunately, these agents may not be aware of other creditors captured in your debt review plan and may not even care for that matter. More so, their promise of a smaller monthly repayment amount may not be in your best interest in the long run. Sometimes, these agents may suggest you opt out of debt review so you can apply for cheaper and better deals. Still, from what we know so far, it isn’t possible for South Africans who are over-indebted to access new credits from licensed creditors.
The problem with an offer like this is that it looks juicy from the surface but will keep you in debt for longer than you expect. More so, people who opt for this option end up in bad habits and repayment problems while trying to get out of debt. With consumers exposed to debt for longer, they still have to deal with compounding interest, no thanks to fees and bad rates that these agents fail to disclose right from the very get-go.
And there is every likelihood that these agents will not give you anything in writing, and frankly, taking such a deal when it comes to managing your finances is reckless. Here is the thing, by exiting debt review for such a purported deal, you’re not only giving up your right to protection and your chance to a debt-free life, but you may also have no paperwork for the supposed better offer they pitched. With this, you’ll be at the mercy of creditors who will threaten you with lawsuits.
Based on the advice of these agents, you may have exited debt review, only to find out later that the better deal they are offering is considered reckless lending. So always check with your debt counselor if your debt review process allows you to accept the deal offered by these agents.
What everyone under debt review should do
With no opportunity for new credit under credit review, the best decision you’ll make is to stick to the debt review process. Sure, it may be difficult at first, but no price is too much to pay for a chance to live a debt-free life. All that is required is patience and determination to see your debt review process to completion. Once you have completed the debt review process, you should be able to take on new credit. But this time, you must have learned your lessons not to repeat the mistakes of the past.
If you seem to be struggling during your debt review process, your best bet is to speak to your counselor, who will be more than happy to guide you and advise you on how you can manage your budget at home. You may even get some tips on some alternative sources of income that may help alleviate some of your sufferings. Sure, the debt review process takes time, but if you’re able to see the process through, you’ll be happy you kicked off the process in the first place. To be honest, no one likes to deal with debts, and with many South Africans heavily in debt, the debt review process is their best chance to live a fairly normal life.
While in the debt review process, it’s always important to keep track of the whole process. This way you have an idea when you might be exiting. Also, try not to fall into the hands of greedy sales representatives who are not out for your good but only interested in the commissions they get for referring you for new credits.
Apply for debt review
If you’re still struggling with debts and constantly being harassed by creditors because of your inability to meet your loan repayment agreements, now is the best time to apply for a debt review. Applying for debt review is simple and hassle-free. Plus, it comes with many perks.
Want to get out of debt fast while avoiding constant harassment from creditors? Apply for debt review now to enjoy all of the exciting benefits and protection of debt review.