Your Comprehensive Guide to Debt & Debt Review
At Atlas Finance, we make it a priority to help guide our community to better financial health and well-being. Being in debt can be scary, confusing, and overwhelming – however, consider us your compass as we help navigate you through the most common questions around debt consolidation, debt review and more.
Are you in Debt?
Debt Warning Signs
While everyone’s finances are unique, certain financial behaviours may indicate poor financial health. A few examples of warning signs that could pose a potential debt risk include:
- Using your credit card to pay for living expenses.
- Borrowing cash from friends or family to pay off other debts.
- Paying only the smallest sum on your credit cards.
- Paying for your vehicle over six or more years.
- Your expenses are more than your salary, needing to work overtime or second jobs.
- Unable to save any money at the end of the month.
- Starting to miss payments.
How To Check If You’re In Debt in South Africa?
One of the most reliable ways to check if you are in debt is to visit a reputable credit bureau or registered credit provider to check your credit record. Examples of credit bureaus are Clearscore, Experian and Transunion. We have over 250 Atlas Finance Branches across South Africa. Visit our branches today to see your credit status and if you are eligible to get a loan today.
Ways to Rescue Your Finances?
There are several ways to help improve your financial health, such as:
- Set a spending goal and stick to those limits.
- Pay off your credit card debts.
- Prioritise paying off your debt, such as loans and credit cards.
- Get rid of the luxuries and unnecessary expenses to free up some cash.
- Talk to your lender or lenders about a payment plan that can work for you.
If your debt is more serious, you may need to take a more active approach to rescue your finances, such as debt consolidation, debt counselling and debt review.
More About Debt Consolidation
Debt consolidation is a debt refinancing approach used to simplify and streamline the many small loan repayments you may have into one loan repayment. Essentially, clumping what you owe and merging your debt. At times, debt consolidation loans can have lower interest rates – making it easier for you to regain financial health, improve your cash flow and get debt-free.
If you’re interested in this debt consolidation loan service, visit one of our 250+ branches nationwide and speak to one of our consultants. Alternatively, call 0800 204 679 today.
Debt Consolidation vs Debt Review: What’s The Difference?
If your credit record is really not looking good and you are severely over-indebted, you may not qualify for a debt consolidation loan and will, therefore, need to look into debt counselling or debt review.
While debt consolidation is a loan you take out yourself to repay debts, debt reviews are handled by professionals to address your debt.
More About the Service of Debt Counselling
Debt counselling is a service that you apply to have your debt assessed. Upon the assessment, you could be declared over-indebted and placed under debt review. The debt counsellor then:
- Speaks to your credit providers.
- Develop a personalised repayment plan.
- Offers ongoing assistance and advice.
What do you Need to Qualify for Debt Counselling?
- To qualify you’ll need to prove you are unable to meet your payments.
- It can be pricey and you might have to pay legal fees.
- You won’t be allowed to borrow any more money.
What are the Debt Counselling Charges?
Debt Counselling can be your saving grace, but remember that there are costs involved to this service:
- Application fee: A payment for Debt counsellors to conduct an assessment.
- Rejection fee: If your assessment shows that you’re not over-indebted you’ll be rejected.
- A Debt Counsellor’s fee: Paid once you’ve been accepted.
- Ongoing fees: Monthly payment that you pay until your debt is sorted out.
More About the Debt Review Process
Debt review is a regulated process or programme designed to help get people out of debt by making the various repayments easier to manage and fulfil.
What Are The Advantages of Debt Review?
Your registered debt counsellor will help you along your debt review process to help you:
- Consolidate your debts and potentially reduce monthly instalments.
- To increase affordability, the payment period of your debt may be extended to lower your monthly instalments.
- Regain financial health while still affording important living expenses without the fear of experiencing legal action.
- Pay off your debts and complete financial rehabilitation with a good credit record.
What Are The Disadvantages of Debt Review?
While there are significant benefits to this as mentioned above, the one main disadvantage is that you will NOT be allowed to take out loans for debt review clients or any other type of credit while on debt review.
While on the debt review program, your debt review status will be listed in your credit record until you have paid off all of your debts in full and the debt review process is complete with a clearance certificate to prove it.
How Long Does Debt Review Last?
Debt review status will stay on your credit record until you have paid off your debts in full, so this time may vary from person to person. However, it may take anywhere between 12 to 60 months (1 to 5 years) to be permanently removed from your record, depending on your financial health.
Does Atas Finance Offer Loans for Debt Review Clients?
As mentioned above, one of the downsides to debt review is that you cannot get credit or loans from other institutions while in debt review. This is because registered credit providers need to practice responsible lending. Debt review is a legal process that assists clients with negotiating a payment plan with their creditors. During this time, they are not allowed to take out loans or any other form of credit.
As such, Atlas Finance unfortunately cannot issue loans to people under debt review.
However, we can help you to take a step towards better financial well-being. Call one of our skilled debt review clearance specialists on 082 879 8474 or email projectsupport@atcorp.co.za today.
