What if I can’t afford the loan and am now in arrears?

A common question, what happens if you can’t afford your loan and are now in arrears? Being in arrears means that you are behind in your payments and have missed one or more when regular monthly installments are required. There are a few options available to fix your situation:

Debt Counselling

Debt counselling is a formal management system that helps to put you back in the driving seat of your finances. Connecting with a debt counsellor, they can arrange for you to pay lower monthly installments and interest rates over an extended time frame. This allows some weight off your monthly budget, freeing up money for basic living costs. Tackling the problem of over-indebtedness, this lets you organize your finances when your debt has become too much to handle.

Debt Review

A tailor made service that allows you to protect your assets from being repossessed, debt review is a way for you to get on top of your overburdened financial situation.

Once placed on debt review, your creditors will be notified and your debt counsellor will arrange an affordable repayment amount as well as interest rate. This ensures you can repay the debt over a longer period of time, giving you more time to arrange your finances. This also protects your assets from repossession, or your finances from garnishee orders, which allows you to continue with daily life without hindrance to your job or earning potential.

While on debt review you cannot take out more credit, this in a sense a stop on your credit transactions until your debt has been cleared.

Debt Consolidation

An option that some see as simpler, although not without its critics, debt consolidation is when you take one loan to cover all your others. This is essence means you can clear your debt with multiple creditors and replace it with one large debt amount at one set interest rate.

As the debtor you do end up paying it off over a longer time which means the interest will work out to be more by the end of it. However paying more than the base monthly installment can help to counteract this. Although the single account means a higher installment amount and often a higher interest rate, as well as longer terms.
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