Debt counselling is a regulated process by the NCR. The process protects consumers from their creditors as no legal action can be taken once the proposed repayment plan has been accepted. It provides an opportunity to regain financial control to avoid future over-indebtedness and at the end of the process a clearance certificate is issued, and the credit record is cleared
Can debt counselling negatively impact a person’s credit score?
- No, during the debt review process the credit bureau will be flagged to indicate a person is undergoing debt counselling. Once the debt is cleared, the credit bureau is updated to remove any reference to debt counselling.
How long does debt review take?
- The duration is calculated based on the amount of debt that is to be repaid. The maximum term an individual can be in Debt Review is 60 months
Why do I not have access to credit when under debt review?
Debt review is a process implemented by the NCR to assist consumers to pay back their debts. Taking additional credit out during this time would impact existing creditor payments and would result in an individual being in a worse financial position. The purpose of debt counselling is to rehabilitate your finances
If a lender grants you a loan while you are undergoing debt counselling, this makes them guilty of reckless lending. …
If you are undergoing debt counselling, this means that you are already over-indebted and can’t afford to repay your current debts. Any additional loans, including debt consolidation, will only complicate your situation. The purpose of debt counselling is to rehabilitate your finances. Adding to this debt will only hinder the process.
Who can apply for debt counselling?
- Anyone who is struggling to meet their monthly debt obligations qualify to apply for debt review, providing they are in receipt of a monthly income and outstanding debt is more than R15k.
What is the difference between debt review and debt consolidation?
- Debt review involves the restructuring of all debt repayments into one affordable monthly repayment by extending the terms of the credit agreements and decreasing interest rates. Consolidation entails taking out one large loan to settle all debts and only paying back one loan. Consolidation loans require that the individual is not over-indebted at the time of application.
How long will it take for an individual to start to feel relief from the stress of their debts?
Almost immediately. Within the first 5 days Meerkat will have drafted a proposal to restructure the debts and have created a provisional more affordable repayment plan.
What does debt counselling cost?
The debt counsellors fee is taken from the first repayment. Creditors have agreed that by negotiating a reduction in interest rates the first instalment is paid to the counsellor. All fees are regulated by the NCR and we follow the agreed industry pricing.