Where can I get a loan if I am under debt review in South Africa? This is a question that plagues many South Africans. In fact, there was a time when I found myself in a similar situation that you are in these days.
The moment I was flagged as “Under Debt Review”, all the credit bureaus and financial institutions refused to lend me money at all. However, I was still able to secure a loan and improve my situation.
So, if you want to know why credit bureaus refuse to pay you more money under debt or how I was able to secure a loan despite my review, you should read the following article. With that being said, let’s get started!
How To Get A Loan Under Debt Review?
The simplest and shortest answer to this query is that you can not get further loans if you are undergoing an active debt review. This is because the moment you are flagged as “Under Debt Review”, it will be displayed across all the systems in the credit bureau chain.
So, when you apply for a loan in any other financial institution, the flag will show up at the time of processing of your loan application. Hence, your application will be rejected right there and then. This is because nobody wants to lend money to someone who is already struggling to pay off their current debts.
Furthermore, the National Credit Act (NCA) has set proper guidelines to prevent financial institutions and credit bureaus from lending money to over-indebted people. In case these institutions lend you money regardless of your debt review situation, they will be guilty of reckless lending.
In any case, you need to understand how this cycle really works. You see when you repay your debts in a timely manner, your credit will stay positive. It is a sign that you are a credible person who pays his debts as per the schedule.
On the other hand, if you are lousy with your repayments and failed to pay one or two installments altogether, this will cause your credit rating to fall. It signifies that you have poor credibility and lenders have a hard time retrieving money from you.
Now, if this credit rating falls below a certain threshold, you will be selected for a debt review by the NCA. It is a sign that you are over-indebted and can not pay your debts at all! Hence, in the debt review, you will receive counseling and education as to how you can settle your debts smartly.
Where To Get A R5000 Loan Even If You Are Under Debt Review?
If you are desperate enough to get more loans even when you are under a debt review, then you may opt for a few available options.
- First of all, you could secure a loan from a close relative.
- They might be reluctant to lend you money or totally oblivious to your credit situation. But it is your best bet to secure a loan despite your worst credit history and failing financial situation.
- Secondly, you could also get a loan from an online lender, credit union, or microfinance organization. This is because they are not regulated by the NCA and do not have to follow their guidelines. However, do keep in mind that they will further overburden you with debt.
So, to sum it all up, it is safe to say that you can not secure a loan officially from a financial institution if you are under a debt review. And any institute that offers you a loan or approves your loan application shall be guilty of reckless lending. This will also weaken the position of such an institute in addition to reducing its chances of staying afloat.
However, if you have a viable plan to pay off your debts and need to get access to instant cash in order to carry out your plan, then you can do so via other means. For instance, you can secure a loan from your close relatives or friends who are willing to lend you money despite your debt review. Furthermore, you can also get a loan from microfinance institutes or online creditors.