Are you considering buying a car after going through debt review? If you have just gone through debt review or are currently undergoing it, it is important to know how long you have to wait before buying a car. This article will provide you with all the information you need to know about how long after debt review you can buy a car.
What is Debt Review?
Debt review is a process that assists over-indebted individuals by restructuring their debt so that they can afford to make monthly payments. During this process, a debt counsellor will negotiate with creditors on your behalf to reduce your monthly payments.
Can you buy a car while under debt review?
It is not recommended to make any large purchases, such as a car, while under debt review. This is because debt review is intended to help you become debt-free, and making large purchases during this time can interfere with that process. Furthermore, you will need to obtain permission from your debt counsellor before buying a car or any other large asset.
How long do you need to wait before buying a car after debt review?
The length of time you need to wait before buying a car after debt review depends on your individual circumstances. Once you have completed your debt review successfully, you will receive a clearance certificate. This certificate will indicate that you have settled all your debts in compliance with the National Credit Act, and you can now apply for credit. The certificate is valid for 90 days.
The waiting period
Even after you have received your clearance certificate, most lenders will require that you wait a period of time before applying for credit. This waiting period varies according to the lender's policy and may take between three months and a year. During this time, it is recommended that you focus on rebuilding your credit score by making all your payments on time and avoiding taking on new debt.
The importance of maintaining a good credit score
Maintaining a good credit score is essential if you want to qualify for a car loan after debt review. When you apply for credit, your credit score will be one of the factors that determine whether or not you qualify and what interest rate you will be charged. A higher credit score will usually result in a lower interest rate, which means you will pay less over the life of the loan.
Conclusion
Overall, it is not recommended to buy a car while under debt review. Once you have completed the process and obtained a clearance certificate, you will need to wait for a certain period of time before applying for credit. During this time, focus on rebuilding your credit score by making all your payments on time and avoiding taking on new debt. Once you have done this, you will be more likely to qualify for a car loan with a lower interest rate, which means you will pay less over the life of the loan.
