Talk to your debt counsellor about your options
When money is tight, a cash loan can seem like the quickest way out. If you’re going through debt review, it can be downright scary.
Maybe the price of transport has gone up. Maybe school fees are due. Maybe you urgently need to cover the cost of medicine.
And you’re hoping there might be a lender willing to help you out of the tight money corner.
The problem with wanting cash loans under debt review is that taking on new credit while you’re in the process is generally not allowed. It can even undo the progress you’ve already made towards getting your finances back on track.
So, before you click on an advert promising “guaranteed approval”, it’s worth knowing what you’re really signing up for.
Debt review is there to help you, not trap you
Debt review isn’t a punishment. It’s there to help people who have become over-indebted find a manageable way forward.
Registered debt counsellors, such as National Debt Counsellors (the number 1 Debt Counsellors in South Africa), work directly with credit providers to restructure your installments into an affordable monthly plan.
That’s why the answer to “can I get a loan during debt review?” is, in most cases, no.
You’ll probably still see adverts offering loans for people under debt review or promoting special debt review loan options. Be cautious. Some of these offers may not comply with the National Credit Act, while others are simply trying to take advantage of people who are already under financial pressure.
Not every offer is as good as it sounds
When you’re stressed about money, it’s easy to focus on the promise instead of the small print.
Some lenders ask for upfront fees before they’ve even approved a loan. Others promise guaranteed approval without checking whether you can afford the repayments. In the worst cases, they’re simply after your personal or banking details.
Even if you do manage to borrow more money, you’re still left with another debt to repay. That can make finishing your debt review even harder than it already is.
If an offer feels too good to be true, slow down before saying yes.
There may be a better way through
Needing money urgently doesn’t always mean borrowing is your only choice.
You might be able to ask your employer for a salary advance. Some people sell items they no longer use, take on temporary work or ask family for short-term help.
These alternatives to loans under debt review may not be perfect, but they can help you get through a difficult period without making your debt situation even bigger.
Pick up the phone before you make a decision
Your debt counsellor should never be the last person you speak to. They should always be the first.
If you are struggling with unexpected expenses, reputable advisors like National Debt Counsellors can evaluate your budget or liaise with credit providers to discuss realistic adjustments.
If your income has dropped or you’ve been hit by an unexpected expense, let them know as soon as possible. They understand your repayment plan and can explain what options may be available before you make a decision that could affect your debt review.
And don’t lose sight of why you started the process.
Debt review doesn’t last forever. Once you’ve completed your repayment plan, your debt counsellor can issue a clearance certificate so your debt review status can be removed.
From there, you can begin rebuilding your credit profile and when the time is right, apply for credit again.
Keep moving towards financial recovery
One of the best ways to stay in control of your finances is to know all the details about where you stand.
Finance365 gives you access to your latest credit score and report so you can understand your credit profile, keep tracking your financial progress and see how you’re moving towards life after debt review.
