28 Jul 0.75% Interest Hike – What it means to your Debt
We’ve all come to expect constant price increases and ever-growing inflation. The ever-rising cost of living and shrinking salaries is placing immense strain on South African consumers. Food and fuel are on the verge of luxury, while many top-shelf companies are struggling to keep their heads afloat. The recent 75bp (0.75%) hike has produced a Repo Rate of 5.5%, with a Prime Rate of 9%. These are merely just facts, so, what does this mean for your debt repayments?
Right off the bat, this has been the greatest hike we’ve experienced in the past 13 years. This means, that despite having persevered through multiple social and economic outcries – 2022 marks the year of continuous interest and price hikes. This not only affects those that are less than well-off, but even the wealthy are trying to keep their cool, with raised repayments being a general concern for all.
Picture this: You find the house of your dreams. You are tasked with a million rand bond payment, which in hindsight is not too expensive. However, with these hikes, you are looking at an additional R450.00 per month. If we go back to November of 2021, consumers were paying nearly R3000.00 rand less on their mortgages!
By taking this hike into consideration, a R300 000.00 car loan over 3 years can set you back just under R50 000.00 in interest charges. A mere R100 000.00 personal loan paid over a single year will incur you nearly R6000.00 rand in interest. This is frightening, considering the already exorbitant price of most luxury goods, such as property and vehicles, have another premium to consider prior to purchasing said item.
The majority of South African consumers find themselves in some form of debt. Be it good or bad debt – the process of accumulating it is near-inevitable. Many credit bureaus will need to adjust their pricing to meet these new rates, considering the payment plan is of variable interest. This means that while the cost of living increases, as do monthly payments – leading to a miserable and somewhat dangerous position to be in as a consumer.
In trying times such as these, a trusted debt company could be the saving grace you need. Debtco Group has over 10 years of experience when it comes to alleviating debt stress for over-indebted consumers. By taking a personalised approach to debt relief, and by keeping your best interests at heart, our team of knowledgeable debt counsellors can help you beat these never-ending interest hikes.
If you are struggling to keep your head afloat and dream of the prospect of being free of debt, Debtco Group can be your one-stop debt alleviation solution. By filling out this form on our website, we can get a better idea of your circumstances and allow you to catch a glimpse of just how much you can save through our services.
Let us help you achieve freedom from debt!