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People under debt review are frequently approached by credit providers offering to grant them loans. However, this is against the law as it will interfere with your debt review process and could lead to a bigger debt trap from which you might never break free.
It is also advisable not to take out any new credit until you have successfully exited debt review and received a clearance certificate.
2. Unregistered Lenders
There are lenders https://best-loans.co.za/lenders-loan/rcs-personal-loans/ who offer debt review loans online that are not licensed. A licensed lender must treat you fairly — this includes not imposing excessive default fees for missed payments. They must also be registered with the Financial Consumer Agency of Canada and belong to a dispute resolution scheme.
This is why the settlement by SoLo Funds, a loan broker that took tips and donations against the law, raised eyebrows among critics. SoLo was fined $30,000 and $50,000 for predatory practices and misleading marketing but didn’t get charged for unregistered debt collection. This is especially puzzling given the hefty fines handed out to Wells Fargo for illegal activity.
4. Exiting the Debt Review Process
The amount of time one spends under debt review varies from person to person, but the maximum time is 60 months (five years). When you successfully complete the process and receive your Debt Clearance Certificate, you are able to apply for a loan. However, it is important to note that you will need to slowly start building your credit score again to do so.
The advantage of going through debt review is that your assets become legally protected while you’re under the process. Therefore, it’s very important that you stay in the process until the final debt settlement is reached. If you decide to leave the debt review process prematurely, your assets will be left exposed and creditors could take legal action against you.
When you’re under debt review, your creditors cannot take legal action against you unless they have received what’s known as a Section 129 notice from the Credit Ombud or a court order. The Section 129 notice informs the credit provider that you are under debt review and gives you the opportunity to refer the debt review application to a debt counsellor, alternate dispute resolution agent or the Credit Ombud. You also have the option to apply for a rescission order at a High Court. However, this is not a quick or easy process and the cost of doing so is on you.
Sifting through lenders to find debt review loans online can be time-consuming. To help, we’ve ranked lenders based on their rates, fees and repayment terms for credit scores up to 600. Additionally, we’ve highlighted lenders that offer pre-qualification, a quick process that doesn’t impact your credit score. Among our picks, SoFi stands out for competitive interest rates, flexible loan terms and no fees for early repayment. If you have a low credit score, consider options such as Discover, which offers some of the lowest minimum APRs and other debt management tools. Fiona is also an excellent choice if you’re seeking a lender that matches you with multiple potential lenders.
Sifting through loan companies looking for debt review loans online can be time-consuming, but it is possible to find lenders that offer competitive rates. Many lenders let you pre-qualify for an offer, which will not affect your credit score. Once you’ve found a lender you’re comfortable with, it is important to consider other factors like fees and repayment terms before finalizing your debt consolidation loan. Fiona, for example, has a variety of lenders in its marketplace, including Discover, which offers some of the lowest interest rates available for debt review loans and various options beyond a personal loan, as well as Upstart, which places less emphasis on your credit and may be easier to qualify for than other lenders.
This article was updated on Feb 28, 2022.
A debt review loan online can help you get a handle on high-interest credit card debt. This type of loan typically comes with a lower interest rate than your existing debt, but it can also come with fees, including origination or sign-up charges. You can find many lenders that offer a debt consolidation loan, including banks, credit unions and online lenders. We recommend that you shop around to compare rates, fees and other features, including repayment terms and potential cosigner options. Many lenders allow you to pre-qualify for a debt consolidation loan, which can help you compare offers without impacting your credit score. Some lenders may also allow you to put up collateral, such as your car or an investment account, to help boost your approval chances or receive a better interest rate.
