Choosing the correct debt counsellor and debt counselling company is a difficult decision to make, with so many companies available. It is very important to ensure that you do your research and choose a company that suits you as the client. All companies are different and have different structures, so the decision is important, so that you enter the journey to becoming debt free with the right fit for you.
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How I ensure that I am using a reputable debt counsellor
Before applying for debt review take the time to look into a few things;
Check with the National Credit Regulator that the debt counsellor is registered
Check with the National Credit Regulator if the debt counsellor has unresolved complaints
Take a look at the website and ensure the debt counsellor has the ability to meet your needs. Things like ease of application, are the debt counsellors knowledgeable, is the website informative.
Make sure you are comfortable with a call centre setup, if not, speak with a company that has debt counsellors dealing with you directly and not a call centre
Ask questions, if they are not answered, be weary.
Take a look at the top 10 debt counselling companies in South Africa, they are there for a reason
Advantages of debt review
Debt review is a handy financial tool, while you are under debt review the following benefits are clear:
Instant protection from debt collectors and legal action from your creditors
Creditors are not able to repossess assets as long as you keep paying your debt review instalment
Lower monthly payments
A single affordable monthly payment
Lower interest rates
In some cases, you may be able to settle your debt faster
You will be paying less on debt and therefore have more money available to spend on living expenses and supporting your family
Disadvantages of debt review
While under debt review - the following effects are to your detriment:
You are not able to apply for more debt while under debt review
In some cases, it can take longer to settle your debt
Your credit profile will be marked as under debt review while you are under debt review so that you cannot borrow money during the process
You are bound to your debt review agreement and it can't be cancelled until you complete your entire debt review plan and settle all your debts
You still need to settle the agreed payment per month so that the national distribution agency can pay your creditors.
When is debt review a good idea
Debt review is a good idea for the following individuals:
You still earn an income on a monthly basis
You pay more than R1500 per month towards your debt
You are unable to meet your living expectations due to the impact debt payments are having on your financial situation
You don't have any judgements on your name
You are not blacklisted by any creditor
You want to save on debt payments on a monthly basis
When is debt review not a good idea
Debt review is not perfect for everyone - some individuals that are negatively impacted by applying for debt review are:
If you are blacklisted or there is a pending judgement against your name
You have lost your income and can't afford your debt anymore
You want to settle all your debt with an available lump sum of money
You can afford to make your debt payments monthly
You want to and think you will afford to buy a house or car in the near future
