The coronavirus pandemic has negatively affected many people’s pockets. Many people lost their jobs which were their only sources of income in 2020, and others got salary cuts due to their companies being hit hard by level 5 of the national lockdown. The restrictions imposed under level 5 forced some companies to close for months, therefore struggling to make ends meet.
You may have purchased a vehicle on credit a year or two ago and have become a victim of one of the above scenarios. If this is you and you are now struggling to pay your debts, continue reading.
In this piece, we will provide solutions to your debt problems and advise those who have found themselves in the predicament of struggling to fulfil their monthly repayment obligations. We’ve put together these three practical tips to help manage your debt.
1. Find out your Credit Score
The first and most crucial step is finding out what your credit score is. If you find yourself drowning in debt month after month, you first need to gain a better understanding of your debt and how it impacts your credit record.
2. Ask for Help
Many individuals find themselves embarrassed and unable to ask for help because of their pride. However, this will only prolong your misery because your finance providers will keep adding interest to your debt, which will make it much more difficult to settle it.
In the worst-case scenario, the bank that has given you a car loan will repossess your car if you go AWOL and your debit order keeps bouncing. Before this happens, call the bank and ask them for options to reduce your monthly instalment. Banks have become better at providing solutions to customers with debt problems, so it’s best to reach out to them as early as possible.
3. Find Extra Money
It will be helpful to find extra cash out of your monthly budget to pay off your debt. There are two options to consider, switching your providers and seeking better insurance premiums. If you’re trying to save money, it is wise to regularly review the utility providers you’re using to make sure you’re getting the cheapest deal. For example, it is wise to check up on attractive cell phone contracts and internet deals regularly.
Attempt seeking better insurance premiums by making a few phone calls to get quotes from insurers. With everything being online these days, you could also opt for the much simpler option of requesting the quote online. Doing this could free up hundreds of Rands.
If the options listed above do not work for you and you do not have a support structure that can assist with settling your debt, the last option to consider is looking into the assistance provided by the National Credit Act - Debt Counselling.
Many people do not know this but if you are in a debt crisis and you are struggling to make any payments, consider debt counselling. Debt counselling follows a specific legal procedure designed to help people who cannot meet their debt repayments. If you’re eligible, the debt counsellors negotiate with the creditors to restructure your debts. It is not easy to undergo Debt Counselling because there are some costs involved, and you will not be able to enter into any new credit agreements. However, if you are in severe debt and there is a risk of the bank repossessing your vehicle, debt counselling can provide a better option to prevent that from happening.
