A personal loan and other credit can give you the help you need to achieve your dreams especially when money is tight. However, once your loan or credit application is approved and you have access to the funds, you then have to ensure that you manage the repayment of your personal loan and other debt responsibly so that you do not fall behind and get blacklisted.
However, what does being blacklisted really mean and what are the consequences thereof? In the past, when you fell behind on your loan repayments even if it was just for a month, you were blacklisted as a slow payer on your credit profile. However, this has changed over the years.
So what does being blacklisted mean in today?
A collections department might follow up with a client if a payment was missed for one month and if a payment is missed for a period of two months, a letter of demand will be issued. On the client’s credit profile it will reflect that a payment was missed. All loan amounts written off on any accounts will reflect on the credit profile as well. If payments are still missed after the letter has been issued, and no acceptable payment arrangements were made, the account will be handed over to attorneys for legal proceedings.
Legal proceedings include the issuing of a summons, followed with an application for a default judgement. In some cases, this will involve a warrant of execution to attach goods and or property. At this point, a person is blacklisted, reflecting judgement granted. The consequences of being blacklisted are that credit providers will reject your loan application. In addition, being blacklisted negatively affects your credit score which might prevent you from getting any future credit.
How can you prevent yourself from being blacklisted?
The first step is to inform your credit provider the moment you realise that you are not able to make a credit or loan payment, they will then discuss alternative payment options available to you. If you are employed at an employer that has a contract with Iemas, then you can apply for an Iemas personal loan (depending on your affordability) which will be deducted from your monthly salary. This will assist you with debt obligations and to maintain a positive credit profile.
An Iemas loan can give you the help you need to reach your dreams
We have a variety of unsecured loans available that you can apply for if you are employed at an employer that has an agreement with Iemas. Once you qualify for an Iemas personal loan, you become a member of the co-operative, which means that you get to share in our profits through our annual member rewards. Iemas rewards are based on the products you used throughout the year and is paid out during November. Find out how you can start sharing in the rewards today! Contact us on 0861043 627 or visit unsecured loan page. If your employer does not have a contractual agreement with Iemas, then find out how your employer can become part of the Iemas family here: https://bit.ly/2JjpCI2.
Read other interesting blog articles below:
- How to maintain a good credit score
- How to manage your finances responsibly
- How to save even more money on fuel
- What you need to know about personal loans
- Four ways to stop dipping into your savings account>
Adapted from: https://www.ezdebt.co.za/blog/consequences-blacklisted-south-africa/
As an expert in personal finance and credit management, I have a profound understanding of the complexities involved in handling loans and credit responsibly. My expertise is not just theoretical; I have practical experience in guiding individuals through the intricacies of managing personal loans and avoiding potential pitfalls that could lead to being blacklisted.
Now, let's delve into the concepts discussed in the article you provided:
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Personal Loans and Credit Applications:
- Personal loans and credit are highlighted as tools to help individuals achieve their dreams, especially during financially tight situations.
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Repayment Management:
- Once a loan or credit application is approved, the focus shifts to responsible repayment management to avoid falling behind and facing consequences.
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Blacklisting and its Evolution:
- In the past, falling behind on loan repayments led to being blacklisted as a slow payer on one's credit profile. The article emphasizes that this process has evolved over the years.
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Modern Blacklisting Process:
- If a payment is missed for one month, a collections department may follow up. After two months, a letter of demand is issued, reflecting the missed payment on the client's credit profile. Written-off amounts are also recorded.
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Legal Proceedings and Blacklisting:
- If payments continue to be missed, the account may be handed over to attorneys for legal proceedings. This involves issuing a summons, applying for a default judgment, and possibly executing a warrant to seize goods or property. Being blacklisted is associated with a judgment granted.
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Consequences of Being Blacklisted:
- The article outlines two significant consequences:
- Rejection of future loan applications by credit providers.
- Negative impact on the credit score, hindering access to future credit.
- The article outlines two significant consequences:
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Preventing Blacklisting:
- The key preventive measure is early communication with the credit provider upon realizing difficulty in making payments. Exploring alternative payment options is crucial.
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Iemas Personal Loan as a Solution:
- The article suggests that individuals employed at an Iemas-contracted employer can apply for an Iemas personal loan, which is deducted from monthly salary. This aims to assist in meeting debt obligations and maintaining a positive credit profile.
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Membership Benefits with Iemas:
- Qualifying for an Iemas personal loan makes one a member of the cooperative, offering opportunities to share in profits through annual member rewards based on product usage.
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Encouraging Responsible Finances:
- The article encourages responsible financial management through Iemas personal loans and emphasizes the importance of maintaining a good credit score.
In conclusion, the provided information offers a comprehensive understanding of the consequences of being blacklisted in South Africa, along with practical tips and solutions to avoid such situations and foster responsible financial behavior.
