Before you apply for a personal loan...

It’s that time of year where our finances can easily go downhill. A quick personal loan can be a great relief if ends just won’t meet after your holiday, Christmas and entertaining the family. Of course it is better not to over spend in the first place, but it happens.

Shop around before deciding on a loan. Fast personal loans like payday loans are expensive because credit providers charge high interest rates and admin fees. Banks’ personal loans are standardized, but it’s still worth looking into the different kinds of loans.

Some consumers opt for consolidation loans to make their debt more manageable instead of getting a loan to afford their living expenses. This is a very good idea. When consolidating your debt you can make your debt more affordable by applying for a secured loan with the lowest possible interest rates.

When you consolidate your credit you only have one repayment per month which makes it easier to avoid debt collectors as you will only have one loan to repay and keep track of. The new loan’s repayments can be less than the combination of your current small loans, credit cards, store accounts and other credit facilities.

This sounds like great news, but only if you can qualify for a secured loan. If you are already overcommitted or if you have a bad credit record you won’t be able to get a consolidation loan and save this way. You can apply to have your debt restructured, however, and get the same benefits as you would have enjoyed with a consolidation loan.

This easy alternative to personal loans or consolidation loans makes it possible, even for blacklisted people, to make your debt affordable and to only have a single repayment each month. A credit counsellor reviews your debt repayments and negotiates a new, affordable payment structure with your creditors.

Debt restructuring is the most affordable form of debt management in South Africa as your debt counsellor’s fee will depend entirely on your affordability. 9 out of 10 South Africans who opted for debt restructuring experienced debt relief and were glad that they opted for the help of a credit counsellor instead of another personal loan.

What to do with debt: Three ways to be on-top of your finances again

Stick to a budget 

It’s really not a good feeling when you realize that your debt is spiralling out of control. For most people it’s hard to cut back on living expenses, but it’s still important to stick to a budget until your debt is under control again. Think of it as a debt diet: you want to learn how to live within your means so you can stay on-top of your debt.

Why not get the help of a debt counsellor? They can work out a budget and help you to stick to it. It’s also perfect for that debt diet as you cannot get loans while under debt review.

Consolidate your debt

 

You can make your debt more affordable by consolidating your credit with a debt consolidation loan. A debt consolidation loan should have lower interest rates and the repayments can also cost less than you are currently paying towards your debt every month.

When you take on a secured loan to pay back small loans, credit cards, store cards and other debts you can save on interest rates and a single debt repayment is much more manageable than numerous debts.

Get your debt restructured 

If you cannot cut back on your living expenses and you don’t qualify for a secured loan to get the full benefits of debt consolidation, you can apply to have your debt restructured.

Debt restructuring is summed up in these five steps to pay off your debt, only two of which you will have to see to:

1) Contacting a debt counsellor and providing them with your financial information so they can prove to your creditors that you are over committed and

5) paying the now affordable, restructured debt repayment every month. 

What do you think will work best for you? We’ll be happy to answer any of your questions in the comments below.

Don’t be an over-spender these holidays

Shocking statistics predict that South Africans will pick up an average of 2kgs in body weight this festive season. Heartburn medication sales are at their highest this time of year as well. Other studies show that a big portion of consumers spend more on food during the holiday season than the entire year!

Are South Africans living in excess without regard for their health and financial security? It very well may be the case. We have the idea that the holiday season can only be celebrated if there’s an abundance and even an excess of everything that makes us feel good momentarily. Food and gifts are at the top of the list during the holiday season. 

I’m the last person to shy away from a good meal or a holiday trip, but I think it’s time that we take a look at our over-spending and over-eating. There are ways to enjoy yourself this holiday season without setting yourself up for financial ruin early next year. 

We live in a country where there is a great inequality between classes and it would be great if, instead of gorging ourselves for days and finding all kinds of ways to spend money this holiday season, we give back to the community, support and animal charity or at least curb our spending so we don’t have to make new debt at the end of December or January. 

Over-eating and frivolous spending is a big part of holiday culture around the world. We may have forgotten how to enjoy ourselves without it. Start by finding what it is you enjoy or why you’re not enjoying the simple things in life. Read 12 Common Causes and Proven Cures for Unhappiness by the motivational geniuses at Marc and Angel Hack Life. 

You might not be able to change the face of holidays, but you can make all the difference in your own life and the people closest to you. Remember that this is the time of year when businesses depend on people spending more than they can and soon the quick loan companies are smiling and consumers are the ones with the regrets. 

If you can afford to, it might be just the break you deserve to take your family to Sun City or a weekend getaway, but keep in mind that it’s usually the small expenses that amount to big problems and not the planned expenses. Looking at ways to make transport, dining and entertainment more affordable for the holiday you are planning can make all the difference to your budget.

Decorating on a budget

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