Experts Expect Another Big Interest Rate Increase

Economists and financial experts across South Africa are warning consumers to expect one more large increase in the repurchase rate (repo rate), which already saw a worrying 75 basis point increase in August 2022. Lending and interest rates associated with loans and credit are directly linked to the repo rate – what does this mean for you?

If you are in debt and have been struggling to maintain your monthly financial repayments, the rising interest rates we are currently experiencing are going to set you back even more. While you may have been just making it before, such severe interest rate hikes mean an increase in the monthly installments you owe your creditors, as banks and creditors increase the prime lending rate as the repo rate goes up. It is more important than ever that you work towards overcoming the debts that you owe, especially considering that experts expect more interest rate increases in the near future.

Over the last year, we have all felt the knock-on effects of steep inflation and the rising costs in everything from petrol and food to electricity and rent/mortgage payments.Inflation hit 7.8%, a 13-year high, this past July, before easing to 7.6% this past August, with every indication that the rest of this year and possibly even the start of 2023 will continue to present interest and repo rate spikes. Continuous loadshedding and weakening global financial conditions are leaving dents in our country’s already fragile economy, and the last thing anyone wants to hear is that it may not get easier anytime soon – unfortunately, this seems to be a reality that we cannot ignore. For most of us, budgets have had to be carefully readjusted, spending has been curbed and paychecks simply do not stretch as far as they should.

Of course, the higher cost of living has also meant that consumers have had to turn towards credit and loans, as they adjust to living with less. While not all credit is necessarily bad, taking on the financial commitment of loan repayments that are unsteady due to rising interest rates can cause you to fall behind on your repayments. If you are feeling the effects of rising interest rates and find your debt repayments have become unmanageable, you may be over-indebted, and could benefit from Debt Review.

Debt Review is a National Credit Regulator approved service that works with over-indebted consumers, to offer immediate financial relief and help them repay what they owe, in line with what they can afford. Our Debtco Group has extensive expertise in providing a reputable Debt Review service to struggling South Africans, where you are given the chance to meet your financial goals and pay all of your debt off for good. It is as simple as reaching out to us online, to find out if we can help you find stability where your debt is concerned.