07 Feb Under Debt Review and Need a Loan Urgently: What to Do

Do you need a loan under debt review and don’t know what to do? It can be tough to know what to do when you run out of money during debt review. According to the National Credit Act, you can’t take out a loan during debt review. It says, “A consumer who has filed an application in terms of section 86( l) [debt review application/ Form 16] or who has alleged in court that the consumer is over-indebted, must not incur any further charges under a credit facility or enter into any further credit agreement.”

You can’t take out credit unless you’ve finished debt review, your application is rejected, you have been declared no longer over-indebted. If a creditor enters into a credit agreement with you, it’s reckless credit, which is illegal.

So, what can you do if you can’t take out credit and need a loan urgently?

This post discusses methods you can use to make money quickly during debt review, including pawning your car or other assets under debt review, selling items, and getting a side hustle.

Pawn Your Car

Approach this option with caution. Remember, pawning your car under debt review could technically be construed as taking out credit, which is illegal under debt review. Always ask your debt counsellor about what’s allowed and what’s not, especially regarding credit.

Your car must meet certain conditions before you can pawn it under debt review.:

• It must be paid off
• Your car won’t be protected from repossession if you don’t pay back your pawn loan
• Technically, you’re taking out new credit, which might anger the Magistrate’s court

This is the case for other assets you may want to pawn, too. If you don’t want to pawn your car, consider selling items on Facebook Marketplace or Gumtree.

Flipping

Flipping is when you fix a broken item and sell it at a profit. If you’re good at fixing cars or technology (like phones or laptops), you could buy broken items cheaply, fix them, and sell them at second-hand prices. If you’re good at sewing, you could upcycle thrifted clothes (turn them into another item) and sell those, too, on Yaga, Facebook Marketplace, or Gumtree.

Generally, electronics and clothes sell well. This could help you stay financially fit.

Get a Side Hustle

If you don’t have anything you want to sell, you could get another job. Some ideas for side hustles include:

• Teach something online: you could teach English or a subject you’re familiar with online on websites like iTalki, Preply, Cambly, and other teaching websites. There’s a large demand in Asia for language learning.
• Become an associate social media manager: if you’ve used social media and are familiar with advertising practices, apply on LinkedIn and Indeed for associate (junior) social media marketing jobs. You can do the same with copywriting, too.
• Work in hospitality: bars are always hiring bartenders because of their high turnover rate. The same goes for restaurants.
• Babysit or tutor: childcare is always in demand.

Otherwise, you could ask your debt counsellor to re-negotiate with your creditors for a bit more financial breathing room.

Re-Negotiate with Your Creditors

Don’t directly reach out to your creditors. Instead, ask your debt counsellor to re-negotiate with your creditors for lower repayments. Note that this could extend how long debt review lasts, so approach this option with caution.

What’s more, you could ask your debt counsellor for financial planning advice. You pay them to help and act as a financial advisor. Take advantage of the opportunity you’ve been given to become better with money.

Let True North Debt Help

If your debt counsellor hasn’t allowed you enough financial breathing room, consider switching debt counsellors. We can help you submit the relevant forms to switch debt counsellors and re-negotiate your repayments on your behalf, helping you add more money to your budget so you don’t have to take out a loan under debt review. To learn more, contact us today.