How to get out of Debt

For consumers who are not succeeding in making ends meet and surviving, debt can come as a massive relief in the form of a personal or instant loan. There are over four million active credit consumers in South Africa at this time. What this means is that this many individuals are currently repaying debts, in addition to dealing with the country’s seemingly never-ending rising costs, of everything from gas and food to the interest rates associated with their loans.

Research estimates that less than a third of South African’s manage to save for their futures or a rainy day, which is a sad indicator of the trouble that working class citizens are in. Struggling with finances causes pressure on individuals and their relationships, and also negatively impacts work performance, moods and our overall quality of life. Options like National Credit Regulator approved Debt Counselling have enabled over-indebted consumers to get a grip on their finances, while helping them to repay debt more easily. Here are other options to consider to get out of debt:

Choose to first pay off small debts, or debts with the highest interest rates

If you pay back more than the minimum monthly instalments due on your debt, you can get out of debt quicker. The less debt you accumulate, the less you will have – when you make the decision to get out of debt, also decide that you will not acquire more loans and accounts.

One effective approach is to pay off your small debts first, as these are easier to finish – you’ll feel encouraged to keep on doing this with other debts, until they are all paid back. Another approach that can save you money is to first pay back debts with high interest rates, as these are costing you more. Go from the highest interest rate debts to the lowest, and start feeling the effects of paying back what you owe instead of just interest on top of it.

Only pay back one, more manageable monthly instalment

At Debtco Group, we know the difference that reduced monthly instalments can have on an over-indebted person. If you can manage your debt more easily by paying back more if you can afford to, you’re freeing up space in your budget to live more comfortably, according to your means. It is important that you continue focusing on the bigger picture – the sooner you’re out of debt, the sooner you can enjoy a quality life, where your money is yours alone. Debt Counselling protects you from the implications of being a poor payer, which includes legal actions like becoming blacklisted, or asset repossession.

The Debt Counselling process will minimize what you owe and how many payments you’re responsible for each month. You will only be paying back one payment each month, which is manageable according to your income and expenses. To be approved for Debt Counselling, you need to earn a monthly income, be assessed and determined over-indebted, and be willing to work with us according to a new debt repayment plan. Ultimately, this process has helped thousands of South Africans overcome their debt for good.

A Consolidation Loan                                   

The option of a Consolidation Loan has its pros and cons, but can help struggling individuals to get a handle on their financial responsibilities and debt obligations. A consolidation loan is a new loan that is taken out to repay all your other loans, so that you only have one monthly instalment to worry about in a month. Note that a consolidation loan most often brings with it a high interest rate.

Find out which of these options is your best choice to make. Get in touch with our Debtco Team today.

To decide which option is best for you, consider your personal circumstances and take the time to study your finances in detail. You can also use our online Debt Saving Calculator, or contact our Debtco Group team for professional insight and guidance.