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
Read More
Smart money management techniques to reach your financial goals

Smart money management techniques to reach your financial goals

FNB Expert Ester Osche wraps up the #BeFinanciallySmart feature by highlighting some important techniques you need to adopt to be well on your way to financial freedom.

Saving should be the most important part of your budget says FNB's Ester Osche

Saving should be the most important part of your budget says FNB's Ester Osche

For the past few weeks, the Be Financially Smart experts have been delivering excellent insights on saving and investing your money. It is an essential part of building your wealth

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.

Popular articles
Africa State of Mind: 'My dream is to be global' -  Sho Madjozi

Africa State of Mind: 'My dream is to be global' - Sho Madjozi

In this episode of Africa State of Mind, Lee Kasumba chats to South African rapper Sho Madjozi about her upbringing, and rise to fame.

'Love your vulva the way it is' - Designer vaginas are dangerous, warns Dr Eve

'Love your vulva the way it is' - Designer vaginas are dangerous, warns Dr Eve

So-called 'designer vaginas' are created through various surgical or non-surgical procedures, explains clinical sexologist Dr Eve.

'Shutdown of Ndalo Media is no surprise and is a blow to media diversity'

'Shutdown of Ndalo Media is no surprise and is a blow to media diversity'

The company will reportedly shut its doors in January 2019.

'Cyril is the most popular president since Nelson Mandela'

'Cyril is the most popular president since Nelson Mandela'

Author Max de Preez weighs in on where SA would be if Jacob Zuma was still president and the impact of Ramaphosa now.

Kidnapping for ransom on the rise in Gauteng

Kidnapping for ransom on the rise in Gauteng

Gauteng MEC for Community Safety Sizakele Nkosi-Malobane says kidnapers are out to get a ransom from desperate parents.

[WATCH] Internet search for talented singer Nosipho is over...she's been found!

[WATCH] Internet search for talented singer Nosipho is over...she's been found!

Khabazela shares tweets and Facebook posts that have gone viral.

'Evidence is solid. Poor people’s money was used illegally. Shivambu benefitted'

'Evidence is solid. Poor people’s money was used illegally. Shivambu benefitted'

Ray White interviews Pauli van Wyk, an investigative journalist with Scorpio at Daily Maverick.

[WATCH] Hilarious little girl tells mom that she needs a boyfriend

[WATCH] Hilarious little girl tells mom that she needs a boyfriend

Khabazela shares some of the most popular tweets, posts, and videos on 'What's gone viral'.

'I thought he was going to rape me' - Ellen Pakkies on killing drug addict son

'I thought he was going to rape me' - Ellen Pakkies on killing drug addict son

'Ellen' The Ellen Pakkies Story, premiers in cinemas on Friday.