Did the Covid-19 pandemic take a toll on your finances and job? Well, you’re not alone, as thousands of South Africans are facing similar situations. According to reports, at least eight out of 10 South Africans have seen their household income depleted since the start of the Covid-19 pandemic. Not just that, 14% of South Africans have also lost their jobs, with thousands unable to meet up with their loan agreements.
A recent survey shows that consumers have seen their usual income reduced by almost R7,500. This has left so many South Africans unable to pay their bills. With many South Africans out of jobs and unable to meet their financial obligations, many consumers are leveraging different payment holidays offered by South African banks and lenders to at least get their lives together while figuring out a way to sort their mounting debts.
How to leverage debt relief
South Africans struggling to meet their obligations are not alone, as banks and lenders are looking for ways to alleviate their problems. So once you notice that your finances aren’t looking as great as they used to be, it’s important to take action immediately before things get out of hand. Before considering options like debt consolidation and debt review, it is important you speak to a professional who will consider other personalized options to improve your situation and help you get your life back on track. The bottom line is debt relief will help you get your life on track and shield you from the many harassments and lawsuits from creditors.
Interest refund and debt relief: How this can benefit over-indebted South Africans
Since the start of the Covid-19 pandemic, many banks and creditors have tried to provide a soft landing to their customers. So for South Africans struggling to meet their debt obligations, taking advantage of payment breaks or variable rescheduling on your loan will do you a lot of good. Besides giving you extra time to pay off your debt, you also get to benefit from a 100% interest refund on interest charged during the first three months of your payment relief. Great, right? We thought so too.
In order to qualify for interest refunds, you have to ensure you make your credit repayments on time. Here is how an interest refund works.
Once you’re able to make up to 6 loan repayments, you’ll qualify for an interest refund of up to 50% for the interest charged during the first three months. However, this refund isn’t paid directly to your bank account but to your loan account.
If you make another six successful loan repayment, you’ll qualify for another 50% interest refund.
Reschedule your debt
Did you know that you can reschedule your loan? Well, many South Africans aren’t aware of this option. But for many years now, debt rescheduling has helped many South Africans get some break from their debt obligations. By opting for this option, you’ll be able to extend your loan agreement, negotiate your current credit agreements and subsequently lower your monthly installment to an amount you can afford to pay. And the exciting part is that the interest rate on your loan doesn’t change.
Another brilliant thing about this option is that you’ll not incur any fees for rescheduling your loan. However, your total cost of credit will increase. And this isn’t surprising since your loan terms have to be extended to lower your monthly repayment amount. Simply put, rescheduling your loan means getting an extension on your loan terms.
To avoid paying more interest, you can increase your monthly installments once your finances start getting better.
We always advise consumers to be proactive about their finances and apply for loan rescheduling the minute they become worried that they will not be able to meet their loan repayment. Also, rescheduling your loan should be your top priority once you have missed one or two repayments.
Since there are many types of loan repayment options, you may have to speak with a professional to get help on which loan rescheduling options work for you. And that wouldn’t be a problem as we are here to guide you every step of the way.
Debt consolidation and debt relief
Debt consolidation is an incredible option available to South Africans finding it hard to meet their loan repayment obligations. Thanks to debt consolidation, you can finally combine all your debt into a single loan. The benefit of this is that you don’t have to pay multiple interests on different loans. Besides extending your loan term, opting for debt consolidation will bring your installments down. If you have been struggling to meet up with minimum payments and would like some breathing space, you’ll not be disappointed to give debt consolidation a try. That said, you’ll need to have a good credit score to qualify for debt consolidation.
As with other options we have mentioned above, there aren’t any special fees for opting for debt consolidation. Nevertheless, you still have to pay the stipulated monthly installments. Plus, the interest rate you end up paying depends on the credit assessment carried out during that period.
Keep in mind that while debt consolidation will lower your monthly repayments, your total cost of credit may be more, and that’s because you’ll have to pay interest over a longer period. To avoid paying more interest, you can increase your monthly installment once your finances start taking shape.
Debt review and debt relief
If you don’t get the relief you expect from debt consolidation, you can opt for debt review. Debt review is perfect for South Africans overwhelmed by their debt. By opting for debt review, you’ll get access to a professional debt counselor who will help negotiate a reduced payment plan based on what you can afford. More so, the debt counselor will assess your living expenses and come up with a payment plan that suits your current financial situation.
Note: Keep in mind that the purpose of debt review is to help you manage your debt. So opting for debt review doesn’t necessarily mean that your debts will be written off. Plus, debt review takes time, so you have to be patient to see the entire process through.
When should you consider debt relief?
Once you notice that your finances are taking a hit and you’re convinced that you’re going to miss one or two payments, it’s important you reach out to your banks and lenders. Reaching out to them early will save you a lot of headaches. Instead of just ignoring your bills and allowing them to pile up, speak to your creditors and bank to see how they can help you.
The worst thing anyone can do during a financial crisis is to stop paying their bills or simply conclude that they will get a payment holiday. To be on the safer side, we always encourage consumers to continue paying their bills until they get a response from their creditors to do otherwise. If you stop making payments without any agreement with your lender, you can end up doing serious damage to your credit score and we doubt if you will like that.
Want help with debt relief?
Living with mounting debts can make your life almost miserable. But guess what, we are here to take all those weight off your shoulders. Instead of being at the mercy of your creditors, we can help you find great debt relief options that will help resolve some of the lingering debt issues you are dealing with. Simply fill out the online form, and we will be more than happy to help you with some debt relief options that should help resolve some of your lingering debt problems. Plus, we are available 24-hours if you ever need to speak to a professional.
With us at your service, you can finally resolve all of your lingering debt problems.