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Consumers battle more and more with credit agreements payments

DEBT CENTER
DEBT CENTER
CREDIT AGREEMENTS DEFAULTS

The dreadful and ongoing COVID-19 Pandemic took its toll on everyone all over the world. South Africa was not spared from very high sustained statistics of infections and a death toll that left countless families in shock and pain. Thousands of households fell in despair, and breadwinners found themselves at the loss of income and unable to make ends meet every month.

The general consumer struggles to repay debt as credit providers now aggressively pursue collections following the payment holidays extensions during the hard lockdown. Debt figures outstanding longer than three months are on the increase, while creditors adjusted their risk assessments, taking a cautious approach to funding new credit.

TransUnion’s Financial Hardship Survey in South Africa showed that Trans Unions Financial Hardship Survey in South Africa showed drew an estimate of twenty-four million credit reports for applications for all major credit categories, i.e., credit cards, personal loans, bank overdrafts, clothing accounts, furniture accounts, vehicle finance, and asset finance, including home loan accounts in the past two months.

Almost four out of five (79%) consumers reported that Covid-19 had negatively impacted their household income. Their survey also showed that concerns about their ability to pay bills and loans remained high at 85%, with 29% expecting to run into a shortfall within a few months.

Consumer’s credit demands on the increase

Consumers’ outstanding debt has increased from 2020 up to the new quarter of the new financial year as demands for new credit increased to avoid default. Due to the bad economic climate, more consumers access personal loans and available credit card facilities to support their day-to-day expenses.

The high increase of unsecured lending is driven by the high unemployment and lowered wage remuneration cuts due to the pandemic’s effects in the work sector. Retrenchment is on the increase placing a further financial burden on already overstretched spending. Lenders know that consumers are desperate for new credit. Granting new loans could increase the inability to repay the debt due to the consumer’s decreased netted income exceeding a margin of 60% of debt payments already.

Fewer approvals of vehicle finance, more repossessions

New vehicle agents have experienced a trend of lesser bank approvals and more consumers’ accounts loaded with higher balloon payments due at the end of the financial agreement term of 5 to 7 years, repayable with an additional and possible vehicle loan at the time.

Covid 19’s 2020 hard lockdown kept vehicle repossessions at bay during a certain time period in the 2020 hard lockdown. Still, with payment defaults that have increased substantially since March 2020, the creditors are pursuing legal action to re-obtain the assets.

Your immediate solution is Debt Center.

We at Debt Center can assess your situation as your debt counselors. We can help you with your debt reconstruction and registration to avoid any of your assets repossessed. Visit our user-friendly website, www.debtcenter.co.za, and follow the prompts on our home page for quick and easy assistance.

We work closely with consumers to help them to manage their debt obligations in a much easier way. We do not offer new loans, but we consolidate your debt into one affordable payment plan instead. The benefit is that an acceptable portion of the income will be available after the restructured debt repayments get reduced, and the reduced payments can be used can then use it for much-needed personal expenses.

Our program and services are designed to improve your financial health, and we help consumers settle unsecured debt over a period of 5 years.

How to fix an impaired credit record

Improving a credit record profile takes time and the full cooperation of the consumer. We at Debt Center will make sure that our clients understand the financial consequences, the short and long term of positive and negative outcomes, and will show you how to recover and survive from your over-indebted status.

We are a well-known debt counseling company registered with the NCR and can be found on the National Credit Regulators’ database, where Debt Center can be verified and authenticated.

How the process works

Instead of applying for a new loan, consumers benefit from the debt program to reduce all the monthly repayments and a cut on interest rates, where the over-indebtedness will be motivated, and the affordability assessment has taken into account.

All secured and unsecured credit agreements can be included 

Debt Center has three registered debt counselors with over 13 years of debt counseling experience and restructuring negotiations with creditors. With a high success rate of acceptances where creditors agree to the new payment terms and lower interest rates that allow their clients to repay the debt over a period of 5 years.

In Conclusion

Debt Center has a very effective remote infrastructure to help consumers anywhere in South Africa. Throughout the COVID-19 period, we have adopted how to conduct business and make contact with consumers anywhere that need immediate assistance. Once the consumer enters the program, the work begins for the debt counselor and their admin teams. Consumers can redirect their focus to getting their life back on track.

Message from the author Annienne Nel

We understand the difficulty everyone is facing during this time. Don’t give up when things look dark with no possibility of an outcome. If you were retrenched, don’t stop sending out your CVs or get creative and start something in sales that can profit. Put your skills to good use and reignite your self-confidence. You are stronger than what we think you are, so don’t give up hope. May God bless you and your family and keep you focused to figure out your way forward.

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