How Long After Debt Review Can You Buy A Car?

If you are under debt review, you may be wondering how long you have to wait before you can buy a car. Although debt review is a process that helps you pay off your debts in a manageable way, it also limits your access to credit. Buying a car usually requires vehicle finance, which is not available to people under debt review. However, there are other options that you can consider, such as rent-to-own agreements or buying from private sellers. In this post, we’ll explore these options and explain how long after a debt review can you buy a car. Before we dive into it, here’s an overview of debt review for those who are not familiar with the concept.

Understanding Debt Review

It’s important to understand the debt review process to understand how long you have to wait before you can buy a car. In a nutshell, debt review is a process that helps you pay off your debts in a more affordable way with the help of a debt counsellor. While you are under debt review, you cannot get vehicle finance for a new car.

Debt review is a legal process in South Africa that helps people who are over-indebted to improve their financial situation and get out of debt. The debt review process was established by the National Credit Act as a debt relief program. In the debt review process, you will work with a registered debt counsellor like Debtco Group who will help you negotiate better terms for your credit accounts, such as lower interest rates and longer payment periods. Debtco will also help you consolidate all of your debts and create a new debt repayment plan, which you will have to follow carefully to make sure that you pay off all of your outstanding debts.

How Long Does Debt Review Last?

The duration of your debt review depends on your personal situation and how you manage your finances. One of the main factors that can affect the length of your debt review is the amount of debt you have. The more debt, the longer it takes. The number of creditors and types of credit you have also have a significant impact on the duration of your debt review. The more creditors and credit types, the longer it takes. Other factors that impact debt review duration include the amount of money you have left after paying for your needs and how well you stick to your payment plan.

After you pay off all your debts in the payment plan, your debt counsellor will send a certificate to clear your debt review status to the credit bureaus. They will then remove the debt review mark from your credit report within 21 days.

So, the time it will take for you to buy a car after debt review is the time of your debt review process (24 to 60 months), plus 21 days for the certificate and the removal of the debt review information from your credit report.

Tips for Buying a Car After Debt Review

Your credit score and credit report may not look so good after you finish the debt review process. This is because your credit score and report depend on how you use and pay for your credit. You may need some time to fix your credit score after the debt review process. So it’s better to wait for a few months before you try to get credit for a car.

If you don’t want to wait, you can look for rent-to-own options that are not so strict about your credit. With a rent-to-own car option, you pay a monthly fee to rent the car. Part of this fee will go towards buying the car until you pay the full price. The price, fee, and rental period will vary depending on the car you choose to rent.

Life After Debt Review

As you can see, a debt review is a good way to pay off your debt and regain control of your finances. Although you’ll have to wait until the debt review process is over before getting a new car with financing, life after debt review is sure to be awesome!

 

Buying a car after debt review: when can you finance again?

The short answer: you can apply for vehicle finance once you have completed debt review and received your clearance certificate, and the debt review flag has been removed from your credit profile. You cannot take on new credit, including a car loan, while you are still under debt review, that restriction is part of how the process protects you.

Step by step to financing a car after debt review

1. Finish the process. Settle the accounts under your debt review and obtain your clearance certificate from your debt counsellor.
2. Get the flag removed. Once cleared, the debt review status is removed from the bureaus, usually within about three weeks. See our guide to debt review status codes.
3. Rebuild your profile. Lenders look at your recent behaviour. A few months of clean, on-time payments and a stable income strengthen your application.
4. Apply. With a clear profile and proof of affordability, you can apply for vehicle finance like any other consumer.

Can I buy a car during debt review?

Not on credit. Taking on new finance while under review is not allowed and would undermine the process. Some people save during their debt review and buy an affordable used car for cash instead, a practical option that avoids new debt entirely.

How to improve your chances afterwards

• Keep proof of a steady income.
• Save a deposit, it lowers the amount financed and improves approval odds.
• Avoid applying for lots of credit at once.
• Choose a vehicle whose repayment fits comfortably in your budget, so you never end up over-indebted again.

Frequently asked questions

How long after clearance can I apply?
You can apply once the flag is removed, but a few months of clean credit behaviour first will improve your chances.

Will I always pay higher interest after debt review?
Not necessarily. As your profile recovers, so do the rates you are offered. Affordability and a deposit matter more than the fact you were once under review.

Want to finish debt review and move on with your life?

Debtco Group (NCRDC 3277) has helped South Africans complete debt review and rebuild since 2010. Call a registered debt counsellor on 021 007 1422 or request your free, no-obligation assessment. Learn how debt review works.