There are so many different ways to borrow money. Friends, family, banks and other money-lenders. If you've borrowed money before, you know that it is important to pay back the money you borrow on time and within the terms of your agreements.
The reality is that where you borrow from has specific consequences. That is why you need to be careful who you borrow from to avoid falling into a debt trap.— Eunice Sibiya, FNB Head of Consumer Education Program
Different types of lenders offer differing levels of services. The Consumer Protection Act instructs Financial Services Providers to have a social imperative to deliver the very best service to their clients. On the other hand, many unregistered money lenders don't adhere to the same rules. That means they can charge whatever interest they want and throw you into a debt spiral.
The emotional pressure of the debt that you have to pay back can become overwhelming - You end up spiraling out of control. When this happens, you need to take a step back, refocus your priorities and take the following strategic steps to pay off the debt.
Keep a record of all your debt - Put together a list of everyone you owe money too. Make arrangements to pay back all the money you owe.
Keep a strict record of all your payments - Use your electronic banking channels to make payments; you will automatically have a record of your payments.
Always adhere to the terms of the loan - This will help you check your interest rates, fees and the loan term. Ensure that you keep to your payment arrangements.
Revisit your progress every month - As soon as you have a cash injection like a bonus or inheritance, use this additional money to pay off your debts. It’s the best financial sacrifice you can make.
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