If you continued to access loans during the process, your debt would spiral out of control and you wouldn’t be able to make the promised repayments. This is not intended to make life difficult for you, but to help you regain financial control. So if you apply for a loan during the debt check, this will be shown on your profile and your loan application will be rejected. With this in mind, you may not exchange your current vehicle for a new vehicle under Debt Review if it is linked to a new credit agreement.
Can you get a loan while in debt?
Debt relief services, commonly referred to as debt settlement companies, offer another way to deal with your debt if you are unable to qualify for a consolidation loan. You may also be able to get a personal loan and cover emergency costs within a day or two if you’re in need and don’t have an emergency fund. Government-backed loans won’t use your credit report to determine if you qualify, so the debt management plan won’t penalize you.
What are the disadvantages of a debt check?
It is a serious mistake to delay the debt review until one of your creditors is already after you, but waiting for more creditors to follow suit is even worse. The downside is that you can’t apply for a loan during the debt check and the only way to stop the review is to pay off all outstanding debts, with the exception of those related to car and home financing. Taking into account all the pros and cons of debt assessment, the pros and cons outweigh and guarantee an effective solution.
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Barry Ritholtz is a renowned finance expert, author and blogger. With over 30 years of experience in the financial industry he has gained a reputation as a thought leader and influencer in the investment community.