The latest quarterly reports by the National Credit Regulator (NCR) reveal that South African consumers are struggling with personal debt.
Over-indebted consumers are also likely to:
- Take missed payments too lightly
- Fall into arrears or default
- Only pay in the minimum amount due, allowing interest to pile up
‘10.5 million South Africans have impaired credit records’
With soaring food prices and interest rates, as well as a weakened rand, this year will be a financial struggle for most consumers, experts warn.
Accordingly, South Africans need to take immediate steps to reduce or consolidate their debts. Two years ago, South Africans were named the biggest borrowers in the world by the World Bank and the problem persists to this day.
‘75% of consumers owe about 75% of their salaries to creditors’
Shocking SA debt stats:
- 7 million South Africans are credit active consumers
- 5 million South Africans have impaired credit records
- Average debt per credit active consumer is R69,750
- 53% of consumers who take out debt are between the ages of 31 – 45
- 75% of consumers currently owe about 75% of their salaries to creditors
- 86% of South Africans borrowed money between 2013 and 2014
Many consumers become victims of loan sharks and predatory lenders. They take out loans with high repayments that aren’t suited to their circumstances. Trustworthy financial institutions will only offer you loans that you can afford to repay and that won’t harm your financial wellbeing.
‘South Africans were named the biggest borrowers in the world by the World Bank in 2014’
Advantages of approaching a reputable lender:
- They are responsible lenders
- You will be able to afford to repay the loan
- They will ensure you understand the risks, costs and obligations
‘National Debt Advisors can offer you a debt solution that will consolidate your high-interest debts’
How can you improve your debt situation?
- Approach a debt counselling firm such as National Debt Advisors.
- We can offer you a debt solution that will consolidate your high-interest debts
- This debt solution is called debt review or debt counselling
- One of our qualified debt counsellors will negotiate with your creditors for lower interest rates and instalments via a repayment proposal
- You will only have to make one lower repayment monthly
- It will also provide you with legal protection against creditors
Debt is not always a bad thing. If used responsibly, it can widen your horizons and create ample opportunities. Student loans, home loans etc. are all designed for self-betterment. Of course, understanding your repayment obligations is essential to ensure you can afford to pay back the loan over the agreed upon term.