Consumers urged to maintain responsible borrowing

He further highlighted the importance of getting an unsecured loan, explaining that it is useful for meeting planned, unplanned, or emergency needs.

“It is estimated that a large portion of South Africans spend up to 75 percent of their monthly income just paying off debt. That means they have little ‘wriggle room’ if something unexpected occurs,” he said.

“Worse still, if you are over-committed with repayments, you can be refused further loans at the time of an emergency, [and] missing payments could also place your future credit rating at risk, making it unlikely that you will be granted further loans.”

He added that it was important to manage loans acquired from a bank to ensure they are beneficial, rather than a source of financial stress.

Kruger further offered tips on how to get this credit, especially when consumers really need it. “One of the most important tips is to maintain a budget; this is essential because if you know exactly what you are spending and what remains, you can budget for a loan,” he said.

Another tip was to check day-to-day spending. This means keeping a pen and notebook handy to take note of everything you spend on a daily basis.

Kruger concluded by encouraging consumers to approach their bank should they see troubled times ahead, as this lets the bank know that you are responsible and proactive in dealing with financial woes.

“Of course, even when things have been well-planned, life can throw curve balls that can cause financial pressure. The best way to deal with a financial crisis is to take action straight away,” he said.

Other tips from Kruger include:

•  Reduce your unnecessary lines of credit: This means reducing multiple accounts as they may subject you to temptation
•  Use your credit card for what you want – if you can afford it.
•  Research carefully the personal loans you want – including interest rates and repayment terms.