Finding financial assistance for people under debt review is a difficult and treacherous journey. But as long as you do your research and choose smartly it is possible.
If you are under debt review, you are likely to have a poor credit history and rating. Without a good credit history, and with many outstanding debts, it would be difficult to find a company willing to loan you money.
However, the fact that you have applied for debt review shows that you are willing to work on handling your money better and paying your creditors back. This might stand you in good stead and give you a chance at finding a loan.
Getting Financial Assistance under Debt Review – What to watch out for
There are several unscrupulous financial service providers who offer loans to people who have been blacklisted or who are under debt review. They offer the loan but with very heavy fees and penalties if you fail to pay up.
Many people have found themselves in an even worse position after taking out a loan like this.
Talk to your debt counsellor about financial aid. With their experience and knowledge of the financial world, they will be able to give you good advice. And steer you in the direction of the best possible loan achievable in your situation.
Before you Borrow more Money
There is a good reason that most reputable financial service providers will not lend money to someone who is undergoing the debt review process.
If you are already in over your head with debt, loaning more money is a very bad idea. In order to qualify for the debt review process one of the requirements is that you have an income which will cover your essential living costs. For instance rent, lights and water, food, petrol, medical aid and insurance.
Your income should stretch a bit further than the essentials so that you can make an offer to your creditors.
If you are in this position, you are likely facing a long time of paying off your debts. Stretching up to a number of years in many cases. Adding yet another loan to that is bad for your future and worse for your credit history.
If you can afford to wait for a time when you are out of debt to consider further loans, then it is advisable that you do so. Being thrifty with your income and living sparingly for a short time will help you in the long run.
A Few More Financial Tips
However, if you do desperately need the extra money and you cannot wait, then take note of the following tips and advice:
- ALWAYS do your research carefully and thoroughly so that you clearly understand what you are getting yourself into. And the plan for paying your way out. Make sure you choose a reputable financial services provider. And read the fine print of your loan carefully. You do not want to end up in foreclosure and have legal action taken against you should you get in over your head.
- Spend the money carefully. Only lend what you need and use it for that specific purpose. Do not be tempted to get a slightly higher loan so that you can spend a bit of money on unnecessary luxuries or items. Even a small amount of money can make a big difference.
- Be prepared for any eventuality. What would happen to your payments if you lost your job or were seriously injured? Would UIF cover your living expenses, your pre-existing debt AND the new loan?
- Seek advice and take it. If you are undergoing the debt review process then make use of your debt counsellor’s knowledge and experience. Ask for advice about what sort of loan to take out. And where to take it from, how to pay it back and how to manage your living costs to accommodate the extra expense. Draw up a plan and stick to it.
Finding financial assistance for people under debt review is not the best idea. But if the extra loan is crucial then make sure you weigh up your options and choose smartly.