What to do if a loan repayment is unaffordable

If a South African loan repayment no longer fits your budget, contact the credit provider as soon as possible and ask for the options in writing. Review the agreement, due date and any applicable credit-life insurance. If you are over-indebted, a registered debt counsellor may be able to assess your position. Taking a new expensive loan to meet an old payment can make the problem harder to resolve.

Gather the facts before making another decision

Find your latest statement, agreement and pre-agreement quotation. Record the amount due, due date, arrears if any, fees, and your reliable income and essential costs. Contact the provider through a verified channel and explain the amount you can realistically pay. Ask for any proposed change, fees and revised schedule in writing. A request does not guarantee that a provider will agree to change the contract.

Check whether insurance applies

If the difficulty followed unemployment, disability or another insured event, review any credit-life policy and its exclusions. The NCR credit-life guide explains that coverage depends on the policy. Contact the insurer or lender for the claims process, required evidence and timing. Our credit-life guide explains what to look for when reading the original quote.

Understand debt counselling

The NCR says debt counselling is a formal option intended to assist qualifying over-indebted consumers through assessment and restructuring. It is not free, does not guarantee a particular saving and is not suitable for everyone. The NCR advises using only a registered debt counsellor, asking for all fees and terms, and understanding how the process affects further credit. See the NCR debt-counselling explanation before signing up with a third party.

A practical order of action

1. Stop and calculate what you can pay after essential living costs.
2. Contact the existing provider using details from your statement or verified website.
3. Ask for written options and the full cost of any change.
4. Review insurance coverage if your circumstances match an insured event.
5. If debts remain unmanageable, verify a debt counsellor on the NCR register and ask about eligibility, fees and consequences.

If you have not yet accepted a loan, use the total-cost comparison and repayment-term guide before committing. Finpanda does not provide personalised debt advice or decide a lender’s terms.

Sources: NCR debt-counselling release; NCR register; NCR credit-life FAQ.