Guiding consumers since 2009

Banks owed Billions...by all of us!

By Staff Writer
Compare banks and save with Justmoney

Banks owed Billions...by all of us!

The National Credit Regulator has responded to new data that shows how much is owed by consumers in South Africa to lenders.

The financial news outlets had a look at this story.

IOL came with the headline that 'Consumers 'in the red' owe banks billions'.

The exact figure that they give is R14 billion.

That is one huge wack of wonga and could start a revolution or five in a small country.

The scary bit is that this is only the tip of the iceberg, waiting, submerged, while the band plays on, is the majority of debt.

That R14 Billion is only what the 41 000 South Africans who are currently under debt review owe.

That is just a small part of the total debt market. Debt review was a process legislated by the government in order to help consumers who have too much debt. You can read our handy guide to the National Credit Act or you can get more information on debt review.

The thing is debt review is designed to help you hang onto your assets if you are feeling the pinch, especially now with the global credit crunch kicking in.

41 000 may sound like a lot but it is really not.

Many people who feel the debt pressure tend to do nothing about it, and that's when your debt can turn into bad debt. The scale of the rising problem can be seen in that there is now 41 000 people under review and this is up from 13 000 last year.

The R14 billion makes up a small portion of the total bond (mortgage) debt in SA of around R800 billion.

The article further states that 'nearly seven million South Africans have fallen into arrears on their debt, or have some form of a negative credit history'.

Business Report carried an article as well. They noted however that the effect of the recent high (and now dropping) interest rates had cooled consumers desire to take on more debt.

This is a good thing, and it is better to get your debt sorted first before you need debt review or have a judgement made against your credit record.

The Mail and Guardian noted that credit growth was slowing which will give the Reserve bank room to cut rates.

The Monetary Policy Committee meets this week, and The Guv, Tito Mboweni is expected to deliver us a rate cut.

However they said that 'The rate of growth in credit extension was expected to have increased at 15, 4% year-on-year, according to I-Net Bridge's Econometer'.

This is still faster than inflation and means we are spending beyond our means. Justmoney reckons you should contact a debt counsellor at the first sign of debt problems, and get yourself sorted to weather the credit crunch.

Recent Articles

Featured New homeowner? Be aware of these extra expenses

You’ve overcome all the hurdles of buying a home. You’ve managed to pay your deposit and your closing payments, and now you’re a proud title deed holder. However, there are other expenses waiting around the corner. Are you prepared?

Your biggest credit conundrums – answered

Understanding your credit health is one of the most important factors in managing your finances. This is because it gives you insight into your debt, your borrowing ability, and your financial history. While many understand this, there are still many questions on how to do just that.

Avoid debt collectors, choose debt counselling

There are two things you can do when you are struggling to pay your debt. You can either let your creditors hand your debt over to debt collectors – or you can let debt counsellors help you deal with your debt.

Retail notes: easy investment option for new investors

Being a newbie in the world of investing can be challenging because you don’t know where and how to invest. With so many investment options, you could easily be befuddled. Justmoney looks at how retail notes can help you cut your teeth in the world of investing.   

Deals

Translux Student Discount

Price: Depends on destination
When: Daily
Where: Nationwide

Zimbali Senior Citizens Discount

Price: From R1342.00
When: Until 14 December 2019
Where: KwaZulu Natal

Free meal for kids at Mozambik Restaurant

Price: Free
When: Until 15 November 2019
Where: Johannesburg, Durban, Pretoria