disadvantages of debt review

While debt review provides relief and structured repayment options, it also has several disadvantages: it can negatively impact your credit score, making it harder to access new credit during the review period; it may be viewed unfavorably by future lenders, potentially leading to higher interest rates or stricter credit assessments; the process can be lengthy and require strict adherence to repayment plans, which might strain your financial situation; it may also involve additional administrative or legal fees; and, in some cases, it can create a stigma or perception of financial instability, affecting your ability to secure employment or housing in certain situations

Debt review was introduced by the National Credit Act in 2007, has helped many South Africans regain control over their finances, we will explore the advantages and disadvantages of debt review to help you make an informed decision about your financial future.It is important to understand both the benefits and disadvantages of debt review. This will help you in making an informed decision about whether this process is right for you.Borrowing money from financial organisations is normal for most people.If all goes well, one pays off their loan in the agreed time period with the lender and life goes on. But sometimes things do not go as planned and debt begins to get out of control. Debt Counselling or debt review is one of the possible options that one can take to walk the journey of paying off debt."Debt Counselling is a formal legal process that provides for a consumer to be declared over indebted. The Debt Counsellor must be registered with the National Credit Regulator and have an NCRDC number" - National Credit Act.

What this simply means is that if you are over-indebted, a Debt Counsellor can negotiate with your credit providers on your behalf to get lower interest rates and reduced monthly instalments. This makes your debt more manageable. However, like any other decisions in life, before making it you have to weigh the pros and cons. Below is useful information you can note when deciding on debt counselling.

As soon as something sounds too good to be true, we naturally start to wonder what the drawbacks might be. To make it easy, we’ve compiled a list of all of the disadvantages of debt review. Here it is:

Credit freeze 

Not all debts may be included 

Not everybody qualifies for debt review 

Standard admin cost (fees) 

 There's so many questions and controversy around Debt Review as a debt relief solution in South Africa.  The primary question is whether it is really advantageous to consumers or not. Debt Review may be the ideal remedy for some consumers, but for others, it is a nightmare rather than a debt relief solution.

What exactly is Debt Review?
Over-indebted and behind on your debt payments? Debt review might help you safeguard your assets by developing a structured, manageable repayment plan for your outstanding debt.