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According to the latest figures from the National Credit Regulator, 23,45 million South Africans are credit active. Of those, 42,3% have impaired credit records.

Repayments on debt

The stark reality is that many South Africans are struggling to meet the repayments on their debt. Over the last few years the people of this country have had unprecedented access to credit, and unfortunately many of us have not managed it very well. Many have found themselves in a spiral of taking on more and more debt to survive, and they need to find a way out. Unfortunately, this can be a very difficult, and very painful process. However, it is possible if tackled in the right way.


Anyone with debt problems needs to take these key steps:

  • Commit to not taking on any more debt. Draw a line in the sand so that you don’t make things any worse than they already are.
  • Understand the situation you are in. Before you can fix the problem, you need to work out exactly how much you owe, to whom, and what interest rates you are being charged on every store card, credit card and loan you have taken.
  • Negotiate with creditors. Speak to the companies you owe and find out which might be able to offer lower interest rates or repayment holidays. Ultimately, they want to get their money back so they may be willing to come to an agreement that will give them a better chance of recovering what they have lent you.
  • Settle on a game plan. The usual advice is to pay off the debt with the highest interest rate first, but this may not always be the best approach if this will take a long time. You may prefer a quick win to make you feel that you are getting somewhere and that your goal is achievable. Paying off the smallest debts first may therefore give you the confidence and momentum you need to tackle the rest.
  • Make sacrifices. You are going to have to find the money to pay off your debts, and that has to come from somewhere. Start by preparing a spending plan that allocates your monthly income to specific expenses, cutting back on those things that aren’t necessities. Also sell things that you no longer use or need or can simply do without. A cash windfall from selling clothes, electronics or DVDs could wipe out a chunk of what you owe and put you on the road to recovery.


Words: Patrick Cairns
Image: Supplied 




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