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If you are a debt review customer and require access to finance, there are lending choices available. It is important to carefully weigh up your options and select a lender that provides competitive rates and fees.
It is not legal to get a loan while under debt review. This prohibition is designed to help consumers focus on paying off existing debt without incurring further debt.
1. Debt Counsellors
If you’re struggling with a heavy debt load, there are several options for help. One is to consult a debt counselor. This person can decipher your credit card debt, bills and other obligations, and create an affordable budget for you. It’s also possible for a counselor to negotiate debt relief, in which some of your debt is forgiven. Or they may suggest debt consolidation, in which a single new loan pays off several existing ones. If you’re considering applying for debt counselling, it’s worth your while to request a copy of your credit report first. This will give you insight into your current credit status and score, and help you decide whether or not you should apply for this service.
It’s important to understand that debt counseling is a process, and it requires commitment and time. A successful program typically lasts for four or five years, during which time you will pay off your debts in a structured manner.
The debt counsellor will work with your credit providers to re-arrange your debt agreements within set industry parameters, so that you’re able to afford the repayment amounts. This will include extending the repayment period, reducing payments or postponing the dates of payment due. A clearance certificate can only be issued when all the debts that formed part of your debt re-arrangement have been paid in full.
2. Lenders
Many lenders in Gauteng are willing to provide loans for debt review clients, as long as you have a solid repayment plan. These personal loans are usually unsecured which means you don’t need to pledge any assets as security. However, before applying it is important to thoroughly weigh your options and pick a lender who provides affordable rates and costs.
This will help you avoid getting trapped in a cycle of debt and ensure that you can afford to pay back the loan. It’s also a good idea to create a budget and carefully plan how you will use the money from your loan. Finally, it is important to note that some lenders charge origination fees which are one-time charges that can add up quickly. These fees are usually deducted from the loan amount so you should consider adjusting your application to include these charges.
In addition to personal loans there are also some lenders https://best-loans.co.za/lenders-loan/just-money/ that offer credit card balance transfers and other services. These services can be a great way to manage your credit card debt and reduce interest rates by moving your debt from one card to another. It is important to be honest about your financial situation and to provide the required documents so that you can understand what your repayment capacity will be and whether you are able to afford a loan.
3. Alternative Lenders
Some lenders will offer loans for debt review clients and these options are often better than what is available from traditional banks. Banks require a lot of upfront paperwork and can take months to get back to you with a decision on your loan application. However, alternative lenders may be able to process your application much faster and can get back to you with an answer within days or even hours.
In order to qualify for a loan from an alternative lender you may need to provide documentation showing that you have paid off some of your debts during the debt review period. This evidence can be provided to the lender from the debt counsellor or from your credit report. It is important to research your lending options carefully and choose a lender with the best rates and fees.
Another option that is open to debt review clients who need financing is to apply for a personal loan. These are loans that do not require the borrower to pledge any assets such as cars or homes. These types of loans are usually unsecured and therefore carry higher interest rates than secured loans.
Debt review companies and debt collection agencies may try to lure borrowers in by making lofty claims about their ability to help them pay off their outstanding debts. While these promises may appear enticing they are often not in the best interests of the consumer. In fact, the tactics employed by these entities can actually hinder the debt review process by encouraging consumers to spend money they do not have or are unable to repay.
4. Online Lenders
Online lenders are generally financial technology (fintech) companies that specialize in one type of funding, such as personal loans. They are typically regulated and can provide borrowers with access to funds through an expedited application, approval and funding process. They often focus on alternative data and automation to make the loan review and underwriting processes faster and easier for borrowers.
We looked for lenders who have a broad range of loan terms, including flexible repayment periods and low APRs, as well as who work with a variety of credit profiles, not just those with good credit. Lenders that offer a variety of ways to apply and receive their funds, including through a mobile app, were also preferred. We also took into account the structure of fees and penalties, including origination fees and late or prepayment charges, as these can significantly add up over time.
