If you find yourself under debt review and in urgent need of a loan, you may feel like you’ve hit a financial dead end. The simple answer to the question posed in the title of this article is no, it’s not possible to apply for a loan if you’re under debt review. This is because the National Credit Act prohibits loans for people under debt review.
This restriction may seem like just another hurdle, but it’s essential to recognise that these regulations are in place not to make life more difficult for you, but rather to help you regain control of your finances.
All hope is not lost, though. We’re going to spend the rest of this article looking at the various alternative solutions available to financial stability, and we’ll also look at the reasons why loans under debt review are prohibited and the implications they would have on you if you’re under debt review.
Firstly, let’s remind ourselves what debt review is exactly.
A Brief Overview of Debt Review
Debt review is a formal debt restructuring process for South Africans struggling to make ends meet at the end of each month. The process was built with you, the consumer, in mind, and is highly regulated and can only be conducted by an NCR qualified Debt Counsellor.
The debt review process allows a debt counsellor to renegotiate and restructure your debt to an amount that’s affordable.
Why You Can’t Apply for Loans Under Debt Review
Imagine a lender throwing you a lifeline loan while you’re in the process of debt review. That sounds great, right? Well, not really. In truth, it’s like adding more weight to an already sinking ship.
The whole point of debt review is to help you sort out the debts you already have. Getting new loans at this stage would mess up the whole process, creating a financial rollercoaster you might never get off. That just makes logical sense, because if you were able to continue accumulating credit and taking loans during the debt review process, your debt would spiral out of control, and you wouldn’t be able to make the committed repayments.
What’s the Alternative?
We understand that money makes the world go round. Obviously, it’s pretty hard to live a normal life without the necessary funds. We get that. This is where we’ve got some positive news for you. There are other options to go to that are safer (and legal) than a loan. We’ve got one that we particularly like:
Talk to Your Debt Counsellor
Consider talking to a Debt Counsellor who can provide insights into managing your immediate financial challenges. At National Debt Counsellors, we help you prioritise expenses, negotiate with creditors, and explore potential debt relief programs.
Our team of Debt Counsellors are registered with the National Credit Regulator and offers you a no-obligation free assessment of your financial situation.
Reframing Debt Review
While getting a loan under debt review is not a viable option, it’s crucial to reframe how you see the debt review process. Instead of viewing it as restrictive, look at it as a constructive step towards long-term financial freedom.
This slight change in how you think about debt review is a game-changer. If you get it right, your life can change. If you’re struggling to manage your debt, take that first step towards financial freedom. Don’t put it off, because your financial freedom is waiting.
