If you are under debt review and need a loan urgently, you might feel like you’ve hit a financial roadblock. The reality is that obtaining new credit while under debt review is not possible due to legal restrictions under the National Credit Act (NCA). However, there are alternative solutions that can help you manage financial emergencies without falling into further debt.
While loans are not an option during debt review, there are better ways to manage financial difficulties...
In this article, we’ll explore why you cannot take out a loan under debt review, the risks of illegal lending options, and the safer alternatives available to you.
Why Can’t You Take Out a Loan Under Debt Review?
Debt review is a structured financial rehabilitation process designed to help over-indebted South Africans regain control of their finances. It is regulated by the National Credit Regulator (NCR), ensuring that consumers can restructure their debts into manageable repayments.
One of the core principles of debt review is that no further credit may be granted while you are under the programme. This is to protect you from accumulating more debt than you can handle, which could derail your financial recovery.
Risks of Trying to Get a Loan Under Debt Review
Although reputable lenders will not approve loans for individuals under debt review, some unregulated lenders prey on people in financial distress. These high-risk options may seem tempting, but they come with severe consequences:
- Pawnshop Loans – You may receive cash in exchange for valuables like jewellery or electronics, but the payout is usually far lower than the item’s value, and you risk losing it if you cannot repay on time.
- Title Loans – These loans require you to use your car as collateral, often at high interest rates, making it easy to lose your vehicle if you default.
- Payday Loans – Some lenders may offer short-term, high-interest loans deducted from your salary, which can trap you in a cycle of debt.
- Loan Sharks (Mashonisas) – Illegal lenders often charge excessive interest rates and resort to intimidation tactics if you struggle to repay.
Alternative Solutions If You Need Money Urgently
While loans are not an option during debt review, there are better ways to manage financial difficulties:
1. Consult Your Debt Counsellor
Your debt counsellor can provide guidance on:
- Restructuring your budget to free up funds for urgent expenses.
- Negotiating with creditors to adjust your repayment plan temporarily.
- Exploring legal debt relief options suited to your situation.
2. Check for Emergency Assistance or Relief Funds
Depending on your circumstances, you may qualify for:
- Employer salary advances
- Community financial assistance programmes
- Government or non-profit financial aid
3. Cut Non-Essential Expenses
Review your monthly expenses and see where you can cut back to free up cash. Small adjustments—like reducing subscriptions or adjusting transport costs—can make a difference.
4. Consider Selling Unused Items
If you urgently need cash, consider selling unused items through reputable platforms like Facebook Marketplace or Gumtree. Just be safe and watch out for scams!
5. Side Hustles & Extra Income
Explore temporary income opportunities such as:
- Freelancing (writing, graphic design, virtual assistance)
- Tutoring or online teaching
- Selling handmade products
I would just like to thank every one from the VHT Team, thank you for changing the live’s of so many people, you help everybody with open arms, and there is not a single thing that i would change about the way that you treat your clients. You guys make the world a better place…
What Happens Once You Complete Debt Review?
Once you have fully repaid your debts under the debt review programme, you will receive a Debt Clearance Certificate, which allows you to apply for credit again. However, it is advisable to build a strong financial foundation before taking on new debt.
Final Thoughts
Being under debt review and needing a loan urgently can be stressful, but taking on more debt is not the solution. Instead, focus on practical, legal ways to manage your financial needs. Consulting with your debt counsellor and exploring alternative income sources can help you navigate financial emergencies safely.
If you’re struggling with debt and looking for expert legal assistance, contact VHT Attorneys today to discuss your options and move towards financial freedom.
Casper Lourens
Attorney
WHO ARE WE AT VHT
VHT Attorneys is a boutique law firm with a large vision. We provide innovative legal solutions with a renowned standard of integrity and confidentiality.
We help our clients:
- Remove Debt Review Status
- Commercial & Corporate Law
- Labour Law
- Dispute Resolution / Litigation
