The Debt

Review Company

Is Debt Review a Good Idea

If you are asking yourself is debt review a good idea, you are not alone. With the fast paced world we are living in and instability caused by uncontrollable factors like the Covid 19 pandemic and the economic repercussions of the conflict in Europe, many South Africans are finding themselves under increased pressure financially and are struggling to keep up with their debts.

As a result, debt review is becoming a consideration but before you go under debt review, you need to understand what it is and the ramifications it comes with.

What is Debt Review?

Debt Review is a formal relief program that was introduced in 2007 with the National Credit Act. The purpose of debt review is to help people who are over-indebted, with a solution that will allow them to pay their debts.

This is done by consulting a debt counsellor, who will negotiate with your creditors, and then bundle all of your debts into one consolidated debt that comes with a lower interest rate. The reduced interest rate means that you pay less to interest and more to reducing your debt.

Debt review also comes at a cost, which is that you are not allowed to take on new debt when you are under debt review.

Who is Debt Review a good idea for?

Debt review is for individuals who qualify as over-indebted after being assessed by a debt counsellor.

This means that you have so much debt that it is unlikely that you will be able to pay it back without assistance.

The debt review will reduce your interest payment, and centralise all your debt payment through your debt counsellor.

The trade-off for this is that you will not be able to get credit from any registered credit providers as it is considered irresponsible lending to lend money to someone who is under debt review.

Who is it not for?

If you are short on money but are still able to pay for your debts, then you should not be taking up debt review. Debt review is

There are many things that you could try first before going under debt review.

The first thing you could do is try to get rid of costs that are not necessary.

You can also make cuts and buy more affordable products.

Many times, a lifestyle change is effective in driving down a person’s monthly expenses and allowing them to better manage their debt.

So is debt review a good idea?

If you are over-indebted, then debt review is definitely a good idea and you should consider it before things get worse.

Being over-indebted means that your debts are more than you are able to pay with your current income. The problem with having debt in that way is that if you end up paying most of your payments towards interest and not reducing the actual debt.

Worse is that if that any of those debts that are left alone, only grow larger because of interest.

Debt review reduces the interest rate

  • Consolidates those debts into one debt which reduces the administrative hassle of managing the different debts
  • By consolidating the debts into one debt, it also reduces the transaction costs that come from having many debit orders or similarly transactions to pay multiple separate debts.

So if you are under financial strain and are unable to keep up with your credit obligations, you should contact a debt counsellor for a free assessment to find out if you need debt review and whether you qualify.

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The Debt

Review Company