Is your Income R7, 500 or more?
Is your total Debt R50, 000 or more?
Is your monthly instalments R4, 000 or more?
Are your debts or some of your debts still with your credit providers and not handed over?
If you have answered yes on then you qualify to apply for debt review
A consolidation loan is where a consumer borrows a large amount of money to settle small debts which results in a consumer paying a higher interest rate and more money. This is what is referred to as “debt cycle” leading to one not being able to honor debt repayments as it becomes unaffordable to do so.
A consolidation loan is given based on the consumer’s affordability and if you are already having difficulty paying your monthly payments the banks may not grant you the consolidation loan.
Credit Remedy offers an alternative debt solution similar to debt consolidation, called debt counselling. The difference is that you qualify if you cannot afford to pay monthly installments, you save a lot of money on interest rate and break the debt cycle.
A debt counsellor will restructure your debts, by negotiating interest rates with your credit providers. Your monthly debt repayments will be reduced as interest rates will be renegotiated to a lower amount.
Debt counselling consolidates all your debt repayments in to one amount, without having to take out a loan. With debt counselling you only have to make one monthly payment to a Payment Distribution Agency.
The repayment terms are determined by the individual’s rearrangement plan and affordability. The payment terms will therefore be different with each consumer.
The process prevents the consumers from being placed into personal administration and having to deal with the effects thereof. Because debt review requires debt counsellors to be registered with the National Credit Regulator (NCR) and follow very specific ethical guidelines when assisting clients, the process is highly effective.
The repayment terms is determined by the below
Your total amount owing to the creditor
How much you can afford to repay monthly
Honoring your repayment plan and avoiding defaulting on payments
Paying more when you have more e.g bonuses
Yes, your commitment will determine how fast you can pay off your debts. The more you pay towards your debt, the faster your debt will get paid off leading to you being debt-free. Below are few suggestions that you can consider if you want to get out of debt faster.
Be aware of your spending triggers
When you are aware of what makes you spend more, such as visiting friends or going to the mall, you can be proactive instead of reactive. You can plan in advance, budget for the visit and commit to not exceeding the budget amount. Avoid impulsive spending.
Pay off debts with higher interest rates first
Save more money on interest rate by focusing on paying more towards accounts that have a higher interest rate and higher balance.
Reduce your expenses
Consider renting a smaller apartment, cut off most luxuries and focus on basic needs. You can trade in your car for a car that is fuel cost effective. Once you’ve paid off your debt, you can upgrade your lifestyle again.
Earn an extra income
Think of ways you can earn multiple incomes that can assist you to pay off your debt quicker. Consider a small business that you can do on a weekend or selling something.
Use extra amount to pay off debt
If you receive money from commission, policies, tax returns, policies, work bonuses, use the money towards your debt payments.
Taking out credit while under debt review is against the law and doing so defeats the entire purpose of the debt review process. The aim is to get you out of debt and it is advisable to avoid taking more debt.
Once you’re under debt review, major banks and lending institutions will not approve your loan application, as this will be seen as reckless lending.
Once you have completed the debt review process and all your debt is paid off, you will receive a clearance certificate which is known as Form 19. Your debt counsellor will notify the credit bureaus that you no longer have any outstanding debt.
The credit bureaus are then legally required by the NCA to remove the ‘under debt review’ flag from your credit profile within 21 business days of being notified.
Once the ‘under debt review’ flag has been removed from your credit profile, you can take out credit again. We advise that this is done responsibly to avoid repeating the cycle of debt.
A credit bureau collects and stores data supplied by credit providers. The data is used to draw up a record of how consumers manage their credit. Credit bureaus fulfill the duty of gathering data and compiling reports on individual consumers and allocate them a credit score.
When a consumer requests to borrow credit from a credit provider, the creditor will approach various credit bureaus in order to determine whether or not they will grant the credit. Not only will they do this in order to gauge whether or not they feel you will be able to manage the credit, but they will also assess whether the requested credit is an affordable amount for the consumer.
Any South African consumer that has a store account, bond, personal loan, etc., will have a record at more than eleven credit bureaus, who receive information from all major credit providers.
Can I apply for debt review alone if I am married?
If you are married ANC ( Antenuptial contract), this is when you are married out of community of property, you can make a single application however if you are married in community of property a joint applications is applicable.
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