16 Sep What Outstanding Payments Can Be Placed under Debt Review?
Have you thought about what outstanding payments can be placed under debt review? The truth is, almost any payment can be placed under debt review, from credit card debt to car payments. The only debt that can’t be placed under debt review is your mortgage, for which you could get a consolidation loan.
Debt review is a legal process wherein you consolidate all your debt into one reduced, monthly payment. Our debt counsellors negotiate with your creditors on your behalf for reduced interest rates, repayments, longer repayment terms, and legal protection. In fact, under the National Credit Act (NCA), you gain access to legal protection as soon as you submit your Form 16 (the application form).
This blog post outlines the payments you can place under debt review, why you might want to, and what this does to your debt.
Payments You Can Place Under Debt Review
Under debt review, you can expect to pay substantially less for credit card debt, store card debt, personal loans, medical bills, student loans, payday loans, and interest. You can also place auto loan debt under debt review.
Usually, you can place any unsecured debt under debt review.
Credit Card Debt
As with most unsecured debt, credit cards are notorious for having incredibly high interest rates and admin fees. This is a sort of insurance policy: since creditors cannot recover their lost income in the event of your default, they charge exorbitant interest on the credit they lend.
Credit cards are easy to overspend on. They can feel like endless money and are very tempting to use on consumer goods, especially those depicting certain status (clothes, jewellery, phones).
Store Card Debt
Store cards have high interest, too, especially since you don’t need to have a high credit score to qualify for them. Sometimes, they even allow you to purchase items on store credit or allow you to sign up despite derogatory marks like judgments and defaults. This is called reckless lending, and could qualify as reason for debt to be written off.
Personal Loan Debt
Personal loans, another sort of unsecured debt, have lower interest rates than credit cards but are still relatively high compared to secured debt.
Medical Debt
When the unexpected happens, like a sudden or grave illness, medical debt becomes a force rife in your finances. Healthcare, especially private service providers, can charge monstrously expensive fees for life-saving procedures and medication. Luckily, medical debt is easily consolidated and reduced under debt review.
Student Loan Debt
When we’re young and hopeful, student loans can seem like a fantastic way to finance our education while studying what we’re passionate about. However, with South Africa’s saturated job market, even those with degrees can struggle to find sustainably paying work, leaving them in the dust with student loans they can’t afford to pay off. Consider consolidating your student loans with debt review, South Africa’s most effective debt help system.
Payday and Microloan Debt
Payday loans are often a short-term solution to overindebtedness. Many people turn to 30-day, 60-day, and 90-day loans with unacceptably high interest rates to afford living expenses, repairs, or even home improvements when it feels like one has no money. If you can’t afford to pay your payday or microloan, contact Debtco Group.
How Does Debt Review Work?
Debt review works by enlisting a debt/credit counsellor to negotiate with creditors on your behalf. They negotiate reduced interest rates, repayments, and longer repayment periods, and often assess for reckless lending, too.
After you have entered debt review, creditors may no longer take legal action against you for defaulting. You’ll make monthly payments that are distributed through PDAs (payment distribution agencies) to your creditors. Depending on how quickly you pay off your debt, also known as repayment capacity, you can expect to be debt-free in as little as 3-5 years.
After everyone is paid back, you’ll receive a debt clearance certificate you can submit to credit bureaux. The bureaux will assess your dispute and remove the debt review flag from your credit profile. After you’ve built up your credit again, you’re free to take out credit responsibly.
Need help with debt? Contact Debtco Group. We would love to help you become debt-free!