Personal debt is a huge problem for many South Africans. With rising costs and increasing financial pressures, consumers have no choice but to hit the loan market. Whether it’s a large personal loan or a quick-fix payday loan, more South Africans have applied for debt this year when compared to the previous period.
Debt-laden Consumers Are Borrowing From Peter To Pay Paul
News24 reports on a few cases where young South Africans have been left financial crippled due to excessive debt usage. 28-year old IT consultant, Buyi Myeni* from KwaNdengezi, south of Durban, has racked up more than R280,000 in debt. He only earns R8,000 per month which doesn’t go very far in his current situation.
“There are days when I have no petrol money to get to work.”
Buyi thinks his only option is to apply for new loans to repay the old ones. This is a dangerous position as it can become really difficult to get out of this debt-cycle.
“There is pressure when you’re a graduate. Even your family regards you as a failure when you have no job or money. So you start applying for loans that become too much to handle. Acquiring credit is easy and tempting in the beginning,” says Myeni.
“Gradually you lose control over your rands and before you know it, you’re drowning.”
There Are Solutions Out There For Those Struggling With Debt
According to a 2015 World Bank Report, South Africa has over 21 million people in debt, 10 million of which are more than three months in arrears on at least one debt. Myeni is one of these 10 million who are not sure where to turn for help and feel trapped.
Luckily for those in this position, there are solutions and remedies available for them. If you have too much debt and have missed debt repayments, here is the first step you need to take. Stop taking out more loans and rather try and see how you can better manage these debts.
Speak to a registered debt counsellor, like Vantage Debt Management, who can give you a free assessment. A debt counsellor will look at your budget, credit report and current situation to determine how best to assist you. Over-indebted consumers are likely to need a debt management solution, such a debt counselling.
Debt counselling assists consumers by reducing their monthly debt repayments as well as their interest rates. The consumer will usually pay off their short-term debt in 36-60 months, as the terms get stretched. The main benefit is the one lower, more affordable monthly repayment. For more information, give Vantage a call or fill out the callback form to receive a call from a debt expert.
*Not his real name