Struggling to repay a loan? Start here

If you can see a repayment coming that you can’t make, contact the lender before the date, not after it. Most lenders have more options before a payment fails than once it has. At the same time, work out what you can really afford, protect essentials like your home, food and transport to work, and get independent advice before you sign up for anything.

Act before the payment date

Waiting usually makes things harder. When a debit order fails, your bank may charge you for it. A missed payment can attract the charges set out in your agreement and can be reported to the credit bureaux, which affects future credit. A conversation a week before the date is easier for everyone than a collections call a week after it.

Write down the real numbers

Before you call anyone, take twenty minutes with a pen and paper or a notes app.

1. Your income for the month after tax and deductions, from every source.
2. Your essential costs: rent or bond, electricity and water, food, transport, school costs and any family support you can’t stop.
3. Every debt repayment: store accounts, cards, loans, car finance.
4. The gap between what comes in and what has to go out.

This list is what lets a lender, or a debt counsellor, help you properly. It also shows whether the problem is one difficult month or something longer.

Put essentials first

Your home, food, electricity and the transport that gets you to work keep you able to earn. Don’t give those up to make an unsecured loan repayment. That doesn’t mean ignoring the debt: it means telling your lenders what you can pay and when, rather than paying one and missing another without a word.

Talking to your lender

Have your agreement or account number ready, a short explanation of what has changed, the amount you can pay now and when you expect things to improve. Be honest about other debts too.

Depending on your agreement and situation, a lender may be able to move a repayment date to match a new payday, accept a smaller amount for a while, or agree a payment arrangement. None of these is automatic, and each one has to be assessed. Whatever you agree, ask for it in writing.

If you are a RandLeaf customer, contact us as soon as you see the problem. Our phone, email and support hours are not yet published. Our page on payment difficulties explains what we will ask and what happens next.

If your income has stopped

Losing a job or being put on short time changes everything at once, so start with the things that bring money in. If you were employed and contributed to the Unemployment Insurance Fund, you may be able to claim UIF benefits; apply as soon as you can, because claims take time.

Check each of your credit agreements for credit life insurance. Some policies cover repayments after retrenchment, for a limited period and under conditions set out in the policy. If yours does, ask the lender or insurer how to claim. RandLeaf doesn’t include credit life insurance, so there is no such cover on our loans.

Then tell every lender what has happened, with a realistic date for when you expect income again. A clear picture now makes any arrangement easier to agree.

Debt counselling (debt review)

If your debts as a whole are more than you can repay, debt counselling under the National Credit Act may help. A debt counsellor registered with the National Credit Regulator looks at all your income, expenses and debts. If you are over-indebted, they propose a new repayment plan to your credit providers, usually with lower monthly payments over a longer period, and the plan can be made an order of court.

Know what it means before you apply:

• While you are under debt review you can’t take on new credit.
• Your credit record shows that you are under debt review.
• The counsellor charges fees. Ask for every fee in writing before you sign anything.
• When the debts in the plan are paid, the counsellor issues a clearance certificate and the debt review status is lifted.

Only use a registered counsellor. You can check one on the NCR register of debt counsellors. Debt counselling is not the same as a consolidation loan, and anyone who offers you a new loan as part of “debt review” is not describing the process in the Act.

If a loan should never have been given

A lender must assess whether you can afford a loan before it lends. If that wasn’t done properly, the credit may be reckless, and a court can set the agreement aside or suspend it. A debt counsellor or a legal adviser can tell you whether this might apply to you. If you have a complaint about how a lender treated you, start with its complaints process. How to complain to RandLeaf.

What to avoid

• A new loan to repay an old one. It moves the problem forward and makes it bigger.
• “Debt help” that starts with a payment. Be wary of anyone who asks for a fee up front to “clear your name”, remove a listing or stop collections.
• Handing over your bank card or PIN. No lender or helper may keep your card, PIN or ID.
• Ignoring letters and messages. Read them. Some set deadlines that affect your options.