Be Financially Smart with FNB

3 ways to get out of debt and curb your appetite for loans

Reckless borrowing. We've all heard about it, we all know what it means, but many South Africans tend to ignore the problems it causes. But what does reckless borrowing truly cost you in the long run? On this week's Be Financially Smart feature FNB's Head of Consumer Education Program, Eunice Sibiya, discussed the long term implications of reckless borrowing and how they can have serious implications on your financial future.

Reckless borrowing or spending refers to unplanned situations that are usually for things that are a want and not necessarily something we need

Eunice Sibiya, FNB Head of Consumer Education Program

Reckless borrowers are often unable to meet monthly expenses because loan repayments outweigh monthly income. This causes an overwhelming feeling of desperation.

The pressure of the situation drives some people to make new debt in order to pay old debt. These loans all carry additional fees and interest rates that increase monthly repayments.

According to Eunice, these are the top 3 steps you can take to get out of debt and curb your appetite for loans

Calculate all your debt and pay extra every month

The first step to take is to calculate all your debts and the interest rates that you are paying on each of them. Simply paying the minimum payments on your loans every month will not reduce your loan repayments quickly enough. So check the terms of your loans and where possible, pay a little extra to cover the cost of your loans.It's also a good idea to start paying off the loans with the higher interest rates first.

Consider a debt consolidation loan

If you find yourself unable to meet the monthly repayments on each of your loans, you may want to speak to a financial adviser about consolidating your debt. Debt consolidation is a great way to manage your interest rate payments because you essentially put all your outstanding debt into one loan account. This will help you to reduce your monthly repayments and increase your disposable income.

Stop spending recklessly

As you keep paying off your debts and increasing your disposable income, it's important to not use that extra money you left recklessly. This will only make your financial situation worse. Rather focus on paying off your debts as quickly as possible so that you can start saving and investing your vital monthly income.

You need to know where you stand financially so you know what to fix. Make sure to get your free yearly credit report"

Eunice Sibiya, FNB Head of Consumer Education Program

Listen to the full audio below:


Recommended

by NEWSROOM AI

702 welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the 702 community a safe and welcoming space for all.

702 reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

702 is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
Investing for retirement and the best time to start

Investing for retirement and the best time to start

How much time do you have left before your monthly income stops? The earlier you start saving for your retirement, the better!

How to juggle the stock market smartly for long-term investing

How to juggle the stock market smartly for long-term investing

The Azania Mosaka Show kicks off Savings Month with a discussion about stock markets and long-term investing.

Property investing as a good long-term investment

Property investing as a good long-term investment

FNB Expert Ester Osche discusses how to turn a property into a stable and rewarding long-term investment,

How to spot an investment scam from a mile away

How to spot an investment scam from a mile away

We've all heard stories of people falling victim to poor investment decisions. Here's what you need to look out for.

How to create that emergency savings bucket

How to create that emergency savings bucket

Head of Advisory Channels at FNB Esther Ochse takes a closer look at ways to help you learn to save and invest.

Managing the risk of over- and under-insurance

Managing the risk of over- and under-insurance

Do you know how much your assets are worth and if you're paying too much for your insurance cover? FNB Expert Eunice Sibiya weighs in.

Popular articles
From Cape to Cairo: 80-year-old Julia travels to Egypt using 20-year-old car

From Cape to Cairo: 80-year-old Julia travels to Egypt using 20-year-old car

‘It took approximately 4 – 5 months because I had to make some stops on the way for repairs.' - Julia Albu, the African Conquest

Madiba’s private secretary Zelda la Grange opens up about money (hers and his)

Madiba’s private secretary Zelda la Grange opens up about money (hers and his)

Bruce Whitfield interviews La Grange about her and Madiba's attitude to money (hopes and fears, successes and failures, etc.)

Unravelling Gupta links revealed in Parliamentary Eskom inquiry

Unravelling Gupta links revealed in Parliamentary Eskom inquiry

Journalists Sikhonathi Mantshantsha and Kyle Cowan discuss just how the Guptas and their associates helped capture Eskom.

How to make money through ‘buy-to-let’ (using very little of your own money)

How to make money through ‘buy-to-let’ (using very little of your own money)

Bruce Whitfield interviews Francois Janse van Rensburg, author of “Making Money through Buy-To-Let in South Africa".

MTN Walk The Talk with 702: Get your entries in and be part of a united Joburg!

MTN Walk The Talk with 702: Get your entries in and be part of a united Joburg!

Join Joburgers from all walks of life come together peacefully, united in their diversity for a fun family day out.

UPDATE: Chilling WhatsApp from Marli van Breda's ex-boyfriend read out in court

UPDATE: Chilling WhatsApp from Marli van Breda's ex-boyfriend read out in court

Marli van Breda's ex took the stand in the trial of triple murder accused Henri van Breda.

3 easy questions could bag you R2000!

3 easy questions could bag you R2000!

WIN R2000! But only if you can prove you're a whiz of the MTN Biz Quiz by answering the following three questions...

Blesserfinder: Matching you with a sugar daddy near you

Blesserfinder: Matching you with a sugar daddy near you

Is social trend Blesserfinder, where girls are allegedly matching up with rich 'benefactors' in exchange for sex, a real thing?