ACCORDING to the National Credit Regulator (NCR) almost 50% of South Africans are struggling to pay their monthly credit bills, while the high cost of living – particularly following steadily increased electricity and petrol prices – are only adding to the national problem.
The stress of having to meet these steep monthly repayments has seen many turning to shifty loan agencies, which aggravates the problem. The repayment interest is high, while no structured debt counseling services are offered.
‘Those who are struggling under the burden on high monthly debt often become desperate, and this makes them extremely vulnerable to bad financial decisions as they seek a ‘quick fix’ solution,’ he explains.
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‘The correct steps to take when you are in this situation is to seek out reputable, structured and professional advice. Debt is not final – it is a situation that, with the correct advice, can be solved in as little as eighteen months.’
South Africa’s consumers are borrowing more. Consumers owed credit providers R1.55 trillion as at March 2014, this represented an increase in the debtors book of 6.9% when compared to March 2013.
Padayachee suggests that people who are struggling to meet their credit payments should seriously consider changing their credit habits.
This can start with small steps of cutting up credit cards and looking at their budgets. Padayachee said people should avoid using unsecured lenders because of the high interest rates and sometimes personal dangers.
Being disciplined and brutal when it comes to finances can be difficult which is why it is advisable to seek professional assistance from debt counselling agencies.
Anba ‘Paddy’ Padayachee is the CEO of Money and Legal Matters. Contact him at Mlm1@telkomsa.co.za
