Debt Solution for Police Officer
Mr K is a 35-year-old police officer from Krugersdorp. As a single parent and the sole breadwinner of his family, supporting two children and three extended family members is not easy.
‘It was immediately apparent that Mr K was over-indebted and likely a victim of reckless lending’
The cost of living has shot up over the last year and, with so many dependents to take care of, Mr K felt that he had to take out credit cards and personal loans just so he could make ends meet every month.
When National Debt Advisors assessed Mr K’s finances, it was immediately apparent to Mr K’s debt counsellor that he was over-indebted and likely a victim of reckless lending.
| Salary: | R6,400 |
| Expenses: | |
| Rent | R750 |
| Electricity | R400 |
| Cell phone | R150 |
| Other transport | R300 |
| Clothing | R300 |
| Food & households goods | R1000 |
| Contingency | R200 |
| School fees | R350 |
| Life, health & critical illness insurance | R200 |
| Bank charges | R50 |
| TOTAL: | R3,700 |
| Available for debt: | R2,700 |
‘After expenses, Mr K only has R2,700 left over for debt repayment.’
Mr K earns a monthly salary of R6,400 as a police officer. His basic monthly expenses come to R3,700. These expenses are essential and he simply cannot afford to cut back on them. This leaves him with only R2,700 for debt repayment.
| Debt: | Interest rate: | Instalment: |
| Debit order loan | 27.13% | R407 |
| Personal Loan | 32.1% | R604 |
| Credit card | 22.60% | R123 |
| Loan | 28.50% | R2,029 |
| Clothing account | 23.00% | R418 |
| Revolving credit facility | 23.20% | R380 |
| Unsecured credit | 27.30% | R847 |
| Store card | 23.2% | R295 |
| Clothing account | 23.00% | R340.00 |
| TOTAL: | R5,443 | |
| Over-indebted by: | R2,743 | |
‘Mr K owes R5443 towards his debts on a monthly basis’
But, if we calculate what Mr K actually owes towards his debts on a monthly basis, it comes to a total of R5,443. This is a big problem because it shows that Mr K was granted more credit than he could afford.
This means he was a victim of reckless lending. It’s the responsibility of the lender to conduct a proper affordability assessment and to ensure that the consumer won’t become over-indebted as a result of taking out credit.
‘NDA had some of Mr K’s debt written off and his total monthly debt payment reduced to R2,083’
That’s why National Debt Advisors took this matter to court and had some of Mr K’s debt written off, so he no longer had to repay it. Not only that, NDA had Mr K’s total monthly debt payment reduced to only R2,083, via debt review.
| Debt: | Interest rate: | Instalment: |
| Debit order loan | 10.00% | R204 |
| Personal loan | 5.00% | R170 |
| Credit card | 6.54% | R87 |
| Loan | 7.47% | R960 |
| Clothing account | 6.60% | R83 |
| Revolving credit facility | 6.63% | R59 |
| Unsecured credit | 7.28% | R342 |
| Store card | 6.63% | R92 |
| Clothing account | 6.60% | R86 |
| TOTAL: | R2,083 | |
| Amount saved monthly: | R3,360 | |
‘Mr K is saving R3,360 and has R660 spare every month thanks to NDA!’
Mr K is saving R3,360 monthly thanks to NDA! As a result, he can now afford his expenses and his instalments. What’s more, he has R660 spare every month, which means he can build up his personal savings too. It’s safe to say that NDA turned Mr K’s situation completely around!
See the rest of our case studies to read about how we’ve turned other clients situations around.
