If you are under debt review it is absolutely imperative that you make every single rehab payment. Your credit providers will act very quickly once you have missed the first payment. Not only will you have to deal with their incessant phone calls again, but by not paying you are giving them the right to […]
28 November 2012
“The latest interest rate cut is a movement in the right direction, but at least 80% of our clients will not see any tangible impact from this. They would still be over-indebted if interest rates halved from their current levels” says Luke Hirst, MD of South Africa’s largest Counsellor DebtBusters.
As a registered debt counsellor, Hirst deals with some of South Africa’s most over-indebted consumers and assists clients in managing their debt obligations. He says that in many cases, clients approach DebtBusters too late and not even new government legislation is enough to get them out of their debt problems.
“South Africans spend up to 75% of the monthly income servicing their debt, whether it be short or long term, so an interest rate cut of 1% is doing very little to help the seriously indebted.”
Hirst goes onto say “whilst the National Credit Act has done a very good job of restricting the flow of credit and preventing reckless lending, many clients have still received credit since June 2007 because of ‘exaggerations’ on their credit applications, the credit bureau information not being up to date or due to the lenders affordability check not being effective.”
“We are seeing a more positive attitude from many of the credit providers, as they have realised that the last resort is to auction the client’s vehicles and properties due to the values these are currently fetching., If they can restructure the clients repayments effectively under Debt Review or through Debt Management then they will certainly go via this route.”