Is it possible to get a consolidation loan when you are under debt review?
My debt is about R200000 and I’m willing to pay R5500 every month.
And is it also true that you can no longer cancel debt review?
Thank you for getting in touch.
No. Unfortunately, the National Credit Act prohibits you from incurring any further credit while you are under debt review – this includes consolidation loans.
I would recommend that you rather work on paying of their debt faster. Pay a little extra on some accounts. Focus on the smaller amounts and start settling them one by one. Also remember to negotiate for a better settlement value when there is not much left on an account.
Once you receive your clearance certificate and have the means to afford the monthly instalments you can apply for a credit again.
Regarding debt review cancellation:
Cancelling your debt review is possible. A signed letter with an instruction for us to cancel is all it takes. A cancellation fee of 75% of the debt counsellor fee is payable if you have not yet paid your first instalment and we have calculated your payment plan.
Remember to consider the following: When a debt review is cancelled, the original credit agreement is revived and the creditors are free to proceed to enforce their rights in terms thereof. That is why we urge consumers not to cancel without making prior arrangements with creditors. We often assist them to do so. First reach a written agreement with the creditor about the capitalisation of all payments in arrears and the resumption of the original instalments prior to cancelling your review and losing your protection. What you must also keep in mind is that your debt review will be listed on your credit profile until a Form 19 is issued. This can only happen when your original instalments according to original contractual terms can be maintained or if your debt is settled.
Also keep in mind that if you exit the debt review prematurely, the flag on the credit bureaus cannot be removed. It can only be removed when;
- you have brought arrears up to date and are able to pay original instalments, or
- if your debt has been settled.
This has been implemented because there were consumers who misused the process to avoid paying their debts, and who then jumped from one debt counsellor to another.
Have a great day.