Is the interest rate hike breaking your budget?
20 February 2014
On Wednesday the 29th of January 2014, the governor of The South African Reserve Bank, Gill Marcus, announced that the Monetary Policy Committee have decided to increase the interest rate by 0.5%.
0.5% may seem to be a significant amount, but what does it mean for you?
- The cost of borrowing money is going to increase. Banks are likely to increase their prime lending rate from 8.5% to 9%. If you are a home loan owner, have personal loans or vehicle finance, you will land up paying back more as interest rates on the loans will increase. For example, if you have a home loan to the value of R1 million and you are now paying interest at the increased prime lending rate; from the 30th of January you will pay R319 more each month than you previously did.
- Anticipated increase in the prices of most goods and services.
- Increase in the cost of food, electricity and fuel prices are likely to follow!
If you have money left over at the end of the month you may be able to adjust your budget to cover the additional costs. Even better, if you have a savings account or if you are a pensioner, you will benefit from the interest hike! New savings rates mean that you will earn a higher return on your savings.
However, a combination of increased interest rates with increasing food prices and petrol hikes could break your budget.
Even worse – Interest rates can be increased again! Ian Wason, CEO of DebtBusters, advises consumers to take precaution in anticipation of further interest rate increases and use this period as a means of building up a financial buffer in order to prepare for future interest rate increases. Alternatively, consumers struggling to make ends meet need to take the right action before it is too late! Turning to taking out a loan, missing debt repayments and negatively impacting your credit record is not the answer – Contact DebtBusters on 086 999 0606 today!
What can DebtBusters do for you?
DebtBusters is here to help you every step of the way to becoming debt free with the debt solution debt counselling! Debt counselling will:
- Reduce interest rates (To an average of 3%)
- Extend your debt payment terms
- Cancel credit provides fees
- Provide financial education
Why debt counselling the best choice for you?
- Average monthly repayments drop by 2/3
- Enables you to make ends meet from the first month
- You only have to make one payment per month
- Being under Debt Counselling stops Credit Providers from contacting you
- We secure your assets
- A court order gives you legal protection
- We can help you manage your monthly expenses
- Facilitates sustainable financial behavioural changes
- Save a significant amount of money on interest and fees