Dealing with debt after a payment holiday

3 min readOct 30, 2020

For many South Africans, the payment holiday offered by credit providers during the three-month period from April to June 2020 came as a great relief. In a recent survey by the debt counselling firm, DebtBusters, a rather grim picture of the consequences of the payment holiday was painted. Payment holidays were an effective short-term solution, but it came at a cost as interest continued accumulating on the debt owed.

South Africans who took advantage of the three month repayment holidays on bond repayments, vehicle finance and personal loans, will now have to pay an extra R30,100 on average. This is on top of their existing debt. To add to the bleak situation, 91% of consumers who suspended their payments on vehicle finance and personal loans are still unsure if they will be able to pay their loans and bills. Fortunately, there are many ways in which you can take control of your financial situation and avoid a debt nightmare.

Your debt repayment plan

Now is the time to put your debt repayment plan into action. If you don’t have a debt repayment plan, the following steps might help you to create and adopt one:

  • List all your outstanding debt and the repayment information, including the outstanding amount, all applicable fees, term of the credit agreement and monthly or yearly instalments.
  • Create your debt repayment plan in conjunction with your budget. This means your focus will be to apply a disciplined debt settlement approach.
  • When you create your monthly budget, try to cut out unnecessary spending and free up every bit that you can to contribute towards your debt repayment plan.
  • Be cautious about immediately increasing your monthly repayment. Remember that you’ll need to afford any increases for months to come, and you don’t want to put extra strain on your wallet.
  • Once a credit facility is paid off, close it down and don’t open it until you are financially stable.
  • One repayment strategy is to target the smallest debt repayments first. This can create motivation as you may be able to pay these off quicker and gain momentum to tackle the bigger, scarier loans.
  • You can find more of our suggested debt repayment strategies in earlier blog posts here and here.

When times are good

When you have the financial ability to reduce your debt, do it. Always allocate any additional income to debt repayment.

If you have a home loan and find that times are good, here are some additional pointers to repay your home loans as quickly as possible:

  1. When you receive your well-deserved bonus, contribute an additional amount towards your bond repayment;
  2. You can ask the bank to shorten the term of your home loan and your monthly repayment contribution will automatically increase;
  3. You can request that the bank increase your monthly debit order. If you’ve received a monthly salary increase, try to increase your instalment by that same amount.

Don’t be afraid to ask for help

If there is no other way out and you find yourself on the brink of defaulting on your debt, most banks have plans in place to assist you as a consumer or business. If you still can’t manage to get back on your feet, it is a signal to seek help sooner rather than later. You can avoid a situation where you can possibly lose everything by getting help from a debt counsellor.

Not only is debt complicated but it can also have emotional effects such as unnecessary stress and anxiety. To make things a bit simpler, read through our blog post on good debt vs bad debt.

Make sure to reach out for support if you need it, and remember that there is always light at the end of the tunnel.

Written by Marnia




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