SA consumers rack up an extra R20b in debt through lockdown payment holidays
More than 1.5 million South Africans opted to take the payment holiday offered by various credit providers during the three-month period from April to June.
Consumers believed it would help tide them over what was thought would be the worst period of the national lockdown.
Now the time has come to start paying the price for a decision that may have saved a business or a home.
Debt counselling company DebtBusters reports that the South Africans who participated have racked up an additional R20.7 billion in debt.
While a debt holiday might have been crucial for many, it's added around 4.2% to the repayments they now owe for those three months says Benay Sager, Chief Operating Officer (COO) of DebtBusters
For those who have a bond, or vehicle finance, generally those interest rates are lower so you would have had less of an additional debt burden.Benay Sager, COO - DebtBusters
But if you are taking a debt holiday on unsecured loans which we know to be generally upwards of 20% in terms of the interest rate, then that added a significant amount to your debt pile that you need to pay back over the coming years.Benay Sager, COO - DebtBusters
It's my sincere hope that the consumers who took up the offer were properly explained what they were getting themselves into... We have no reason to believe otherwise but we genuinely hope the consumers had done the sums before agreeing to it.Benay Sager, COO - DebtBusters
Is there a possibility that the offer will come up again as the pandemic continues?
Listen to Sager's predictions below:
This article first appeared on 702 : SA consumers rack up an extra R20b in debt through lockdown payment holidays
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