5 things South Africans ask about loans while under debt review
Reading time: 4 minutes
Living costs don’t stop because you’re under debt review. Transport must be covered. School expenses come up. Medical bills can arrive when you least expect them.
So if you’re wondering, “Can you get a loan while under debt review?”, you’re not alone.
Here are five of the questions South Africans ask most often.
Question 1
Can you get a loan while under debt review?
For most people, no.
Debt review is designed to help you repay the debt you already have. While you’re under debt review, registered lenders generally can’t give you new credit.
That’s because the process is there to protect you from taking on even more debt while you’re working towards becoming financially stable.
Taking out a loan without following the rules could leave you in even more financial difficulty.
Question 2
Are debt review loans real?
This is where many people get confused.
There isn’t an official loan called a “debt review loan.”
Some companies advertise loans for people under debt review, but these could be:
- Illegal lenders
- Scams
- Debt consolidation products for people who have already completed debt review
Most adverts using the term “debt review loan” are referring to something else or targeting people who are close to finishing debt review.
If someone promises guaranteed approval without checking your financial situation, treat it as a warning sign.
Question 3
What can I do if I need emergency money?
If you’re searching for emergency loans during debt review, there are safer ways to manage an unexpected expense.
You could consider:
- Asking your employer about a salary advance
- Speaking to family if possible
- Checking whether insurance covers the expense
- Selling things you no longer use
- Looking for temporary extra work
These alternatives to debt review loans can possibly help you deal with an emergency without taking on debt.
Question 4
Is debt consolidation the same as debt review?
No.
Debt consolidation combines several debts into one new loan.
Debt review restructures the debt you already have without giving you new credit.
If you’re already under debt review, you generally won’t qualify for a debt consolidation loan until you’ve completed the process.
This is one of the main reasons debt review loan eligibility is so limited while you’re still under debt review.
Question 5
How do I qualify for credit again?
Debt review doesn’t last forever.
Once you’ve completed your repayments, your debt counsellor needs to issue a clearance certificate to you.
After that, your debt counsellor must notify the credit bureaus so your debt review status can be removed.
Updating your credit record may take a few weeks before the changes appear.
Once your credit record has been updated, you can start rebuilding your credit history and apply for credit again if you really need it.
But before you borrow again, remember this
If someone asks for upfront fees, guarantees approval or pressures you into signing quickly, be careful.
Legitimate lenders follow South Africa’s credit laws and assess whether you can afford the loan.
When in doubt, speak to your debt counsellor before making any new credit or loan decisions.
Check before you apply for credit
Whether you’re still under debt review or preparing for life after it, your credit report can help you understand your current financial position.
Finance365 gives you access to your latest credit report and your credit score that you need to keep checking so you can see where you stand before making your next financial decision.
