The financial repercussions of the Covid19 – Virus “Stay at Home” Lockdown thus far is nothing to take lightly. It has brought the South African economy to an almost complete halt as the infection rate keeps on rising, leaving the country in fear for the worst. Companies big and small felt the heavy pinch of Zero income, and for many, it was an unavoidable end of business and loss of jobs.
On a national based research survey, the TransUnion Global Report revealed the pandemic’s impact on households’ finances in South Africa. After more than 9200 Consumer interviews, the results showed that about 84% of young South African adults, and an average of 76% of all other age groups, were severely affected by the pandemic. Our source is ‘IOL News.’ in the weekly report of 17 May 2020.
We all stayed indoors for too long and our normal way of living changed forever. Issues like hunger, famine and adversity overwhelmed the community and it leads to desperate people applying for quick loans to save themselves.
To the rescue
Debt Centre has a highly experienced team of counsellors with strong legal support to offer you the best options of financial rescue. We follow the rules and regulations of the National Credit Act and can ensure you real peace of mind.
The economy received a small boost with the ease of the strict regulations at Level 3 and many companies could reopen for business. For many consumers going back to work, they have to accept that their income packages remain reduced and not sufficient, although their payment holiday is almost at its end and soon the creditors will be actively enforcing the new increased payments. When the payments cannot be met, we advise you to visit our website and apply for our debt review program before it’s too late. The registered debt counsellor has the mandate to negotiate a payment break when entering the debt review process and motivate the personal circumstances to protect against legal action.
Before COVID19 consumers were not over-indebted finding themselves being over-indebted now and in desperate need to reduce debt repayments.
Our duty is to assess your financial situation, to see what you can afford to pay. To determine if you are over-indebted and how we can restructure a new and better payment plan to suit your needs.
We negotiate lesser instalments and motivate the living cost of our clients to creditors, present it to the court for approval, and register them under the debt review program. Once your payment plan has been approved the magistrate’s court or National Consumer Tribunal will make it an official court order.
The benefit to the consumer is that the court order enforces the payment plan and sets out the amount distributed to all creditors. It will also enforce the reduced interest rates agreed on so that the creditors have to amend the account as per the arrangement.
We ensure our clients dignity and protect their rights to basic living expenses for their families.
Our latest website tool to check your own status
To qualify yourself on our website www.debt center.co.za to see if you are over-indebted and need our help or not, we invite you to use our unique financial assessment calculator: https://www.debtcenter.co.za/financial-debt-calculator/ is our link designed to assist our visitors to take the assessment test in the comfort of their homes. It will save time to know whether your need to apply for debt review or any of our options on offer, or to contact us at Debt Centre.
Note of knowledge
All debt relief and emergency short-term loans must be recorded on the credit bureau database.
Consumers need to know that all credit information must be on record at all credit bureaus in South Africa. According to the terms of Regulation 19 (13) of the National Credit Act, 34 of 2005, part of the amendments published in March 2015, a credit provider must submit all credit information to the credit bureaus in the manner and form prescribed by the National Credit Regulator.
Payment relief options available for consumers:
- Three months payment holidays on the vehicle, home or personal loans granted with an extension on the original term of the credit agreement.
- Short term payment breaks from the monthly debt
- Limited Reduced Instalments
- Credit life insurance that would cover major debt for six to twelve months
- Temporary UIF – employee relief fund schemes
- Qualified bank loans to cover day to day running costs during the lockdown.
- Extended overdraft grants at the bank to cover expenses for three months
- A fifty-five (55) day interest-free agreement can be arranged on your credit account, in accordance with the terms and conditions of the bank.
- Access on your existing bond at 8% less than the current interest rates.
- Debt Consolidation covers all the current credit agreements into one new loan, you must have a very good credit score and report to qualify.
Payment relief terms overall
When you qualify for a payment break or extended holiday make sure you understand the agreements and the rate of interests given by your creditors and bank. Where consumers have access credit on a credit card account or on an overdraft, they will pay more than 20% interest on amended terms. Consolidation loans interests can be more than 16% calculated on longer payback periods Consumers are usually unaware of the interest rates on repayments, the service and insurance fees collectively, which will affect their instalments at the end of the day. It would be a good idea to find out how much interest the payment holiday will cost you after the three months period has lapsed.
Which accounts are considered eligible for Debt Review?
- Home loan accounts
- Second bonds registered on a property
- Vehicle finance
- Credit card facilities
- Overdraft facilities
- Store cards
- Personal loans
- Arrears accounts
- Arrears accounts where the summons has not been issued.
- Registered micro-lender loan accounts
- Pension fund loans
What fees can the debt counsellor charge for these services:
- The once-off fee can’t be more than R9000.00, and when less than the maximum fee it will be equal to the distribution fee for example R4500.00
- We also have an aftercare fee of 5% that may not exceed R450.00
Know the differences between good debt and bad debt.
Your home loan is one of the best investments you can have, and considered good debt, it increases in value and an asset you might want to protect when you find that you can’t afford the contractual payment any longer. Bad debt is money borrowed to cover the daily costs of the house expenditure on variables.
Tip for the wealth planners
A good strategy to become debt-free is to utilize a portion of the money you are saving on debt review, invest it in pension annuities for when you would need it most. Consult a professional financial planner or your bank for investment options, pay cash for the little things and save on bank costs on your card.
Educate the youth
During this difficult time of the pandemic, we are celebrating Youth month in June. This is a great opportunity for parents and banks to share financial tips with them, to ensure they understand the possibilities of financial wealth and savings for their future. This economic uncertainty of Covid 19 is ideal to educate the young working class to rehabilitate their debt and start with a clean slate.
This journal is about the help that is out there for those who panic about their debt struggle. Consider the options we have provided for you, and stand to gain from the professional service we at Debt Centre has to offer. At the end of the day debt becomes a tight noose around the neck of the breadwinner of the house, and we know the stress of the loss you had to endure. Allow us to help you before you are in it too deep, Debt Centre is your Rescue.
Message from Author: Annienne Nel
Throughout my years of helping consumers with their debt problems, I must admit that the financial impact that this Covid19 – Lockdown had on everybody, is one of the worst I have seen so far. The losses across the board are so big that it has directors of companies worried with their hands in the air. This is a time where you need to reach out to us to rescue you from drowning, and that is when Debt Centre will throw out a lifeline for you.
I pray that you all get through this with good results and strong faith. May God bless your finances and your house. Until next time, take care of your families.