For many South Africans, personal loans may seem like a quick fix during tough financial times. However, these loans often come with high interest rates and rigid repayment terms that can trap consumers in a cycle of debt. In many cases, this leads to over-indebtedness and the need for debt review. While debt review offers protection, there comes a time when it may no longer be the right solution. If you’ve managed to regain control of your finances, removing the debt review status can open up new opportunities. In this blog, we explore how personal loans can negatively affect your financial health—and how debt review removal can help you take back control.
The Hidden Cost of Personal Loans
Personal loans are widely marketed as convenient financial tools, but they often come with pitfalls. High interest rates, admin fees, and inflexible repayment structures can quickly turn a short-term solution into a long-term burden. Many borrowers find themselves juggling multiple loans, using one to pay off another, and falling deeper into debt.
If you’re not careful, personal loans can worsen your financial position rather than improve it. When monthly instalments exceed your affordability, you may fall behind on payments, leading to penalties, collections, and even legal action.
How Debt Review Can Help—Initially
Debt review was introduced through the National Credit Act (NCA) to assist consumers who have become over-indebted. Under this process, a registered debt counsellor assesses your financial situation and restructures your debt into a more manageable payment plan. While this provides immediate relief and asset protection, it’s not a permanent fix.
When Debt Review Becomes a Hindrance
Although helpful in the beginning, debt review can eventually restrict your ability to grow. Once your financial situation improves or your debts are paid off, staying under review limits your credit options. You may struggle to secure a home loan, car finance, or even certain jobs requiring a clean credit record.
Debt Review Removal: A Vital Step Forward
Debt review removal is a legal process that declares you no longer over-indebted. Contrary to popular belief, this doesn’t happen automatically—even if you’ve paid off your debts. You’ll need to apply through a court and provide documentation to support your financial stability.
Removing your debt review status is not about dodging accountability. It’s about recognising growth and moving forward. If personal loans contributed to your financial struggles, taking back control starts with clearing the debt review listing.
Myths About Debt Review and Personal Loans
Many consumers believe that once they enter debt review, they can’t remove it until a debt counsellor issues a clearance certificate. While this is true in many cases, it’s also possible to approach a court directly to declare that you’re no longer over-indebted.
It’s also a myth that personal loans are always helpful. Used recklessly, they can worsen your credit score and financial standing—leading many into debt review in the first place.
How NDCSA Supports Your Financial Comeback
At NDCSA, we specialise in helping South Africans remove the debt review status and start fresh. Whether personal loans pushed you into financial hardship or you’ve since paid off your obligations, our team is ready to assist with:
Restoring Your Financial Standing
Once your debt review status is removed, you can begin rebuilding your credit profile. This opens the door to responsible borrowing and financial growth—without the weight of past mistakes.
It’s Time to Start Over
If personal loans have put you in a worse financial position and you’ve worked hard to regain control, there’s no reason to stay under debt review. NDCSA is here to help you take the final step toward full financial recovery.
Contact us now for expert advice tailored to your needs.
Your second chance starts with a smart decision.
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