Who gives loans for debt review clients in South Africa? And if you are under debt review which lenders will offer you a loan? We look at these questions which can sometimes be tricky but there is hope. Everyone feels the financial pressure after the Covid pandemic. However some people feel it more because of the fact that they may be unemployed. And are not able to pay off money due to credit companies and have their finances put under scrutiny.
Popular Places to Find Loans for Debt Review Clients:
- Cape Town
- Port Elizabeth
As a result of job losses people in South Africa have to pay money back after they got those nasty letters from their creditors.
If you can’t make arrangements with your creditors in order to pay back what you owe over an extended period of time you should contact a debt counselor.
This might also interest you: Financial Assistance for People Under Debt Review
A counselor will help you manage your debt more effectively and at reduced rates. This means you will therefore be under debt review.
Although debt counselors do charge a fee they are the reason that some people are able to clear their debt. And ensure that they were not blacklisted.
However what happens if you are under debt review and you require a loan for an emergency?
Well finding loans for debt review clients in South Africa is what a number of organisations now specialise in.
They have realized that even people who have taken the steps to contact a debt counselor. And are now under review are still finding it extremely difficult to pay off their monthly installments.
As a result, they are offering bad credit loans to these individuals in order for them to survive.
There are two types of loans that are on offer to people who have a bad credit rating:
Loans for People under Debt Review in SA
The banks favour a secure loan as it requires you to put up some sort of assets. In order to cover the money you borrow should you not be able to pay it back.
However this could land you up in a worse situation than you were in before you took out the loan.
In addition the chances of getting a secure loan while under debt review these days are slim.
Because should you for example use your house as collateral and not be able to pay, then these creditors will have every right to take your house in order to recover their money. This means that you could end up homeless as well as broke.
These loans to do not require you to put up anything to cover the loan. As great as this may sound there is a catch. That catch is higher interest rates.
This may seem like something that you are willing to spend more on. If it means that you get to keep your assets. But you could end up paying double or even triple the amount of money you initially had to borrow.
Although there are ways to get money if you are blacklisted in South Africa or have a bad credit history it is not the best idea.
The reason for this is that should you default on even one of your repayments then this will negatively reflect on your credit history. And this will put you in a worse situation than you were in before.
What Type of Loan is Best if you are under Financial Scrutiny?
The best advice that we could give you would be to take a debt consolidation loan.
Although this means that you are taking out another loan, this type of loan will pay off all of your outstanding debt to all of your creditors.
Therefore will leave you with a lump sum with one creditor that you will have to pay back.
This type of loan allows you to manage your debt more effectively. And the terms of this kind of loan are generally much better than you would expect.
You negotiate with the lender to pay off the amount in a reasonable time frame and at monthly installments that suit your budget.
So if you are in debt speak to a debt counselor today. If you do not see a light at the end of the tunnel and discuss a debt consolidation loan with them.
Debt Review Process in South Africa
The debt review process in South Africa begins when an individual goes under review. You can contact any finance review company and give them your details. And they will be able to help you start.
It is quite a procedure, and it takes a lot of time. But it can be worth it if you have the patience to do so. A debt counselor or consultant will stand by you and help you get through your money problems.
Once you have found the company you want to work with you will have to sign an application form. Because that will state you giving them full permission to take over your debts.
The application form is known as a Form 16 and will be supplied to you once you contact a debt review company. And you will fill it in and send it back with other documents they require.
Debt Review Form 17.1
After all this is done the next thing that happens with the debt review process is all the information from the Form 16 will be captured. Then in a few days your creditors will receive the Form 17.1. Which informs them of your financial situation.
Once this has taken place, no creditors can take legal action against you for unpaid accounts.
The process of debt review normally takes about sixty working days. And the creditors have five days from receiving the Form 17.1. To supply the company with the information they require about your debt with them.
The next step that takes place is the consultant you are working with will prepare something called a “debt restructuring proposal”. To give to your creditors.
This proposal has to be sent to them within twenty-five days of them receiving the Form 17.1. The creditors then have ten days to get back to the consultant regarding the proposal.
The debt review process might seem like a bumpy ride in the year 2021. But it will make your life a lot easier as the consultant will do everything for you. And you won’t be left with so much debt every month.
In Summary of Loans for Debt Review Clients
To summarize we have learnt that it is possible to get a loan if you are under debt review in South Africa. We have also learnt that it might not be a good idea and that it can be difficult.
You certainly won’t qualify at any of the banks with such a bad credit record so that is not an option.
Therefore you have to think outside the box and look at alternative ways to borrow money.
One place you can look to find private lenders is on Gumtree. Just be careful. Because there are a lot of loan sharks in South Africa. These private lenders offer loans to people who are under debt review but at higher interest rates than normal.