|The facts speak for themselves with this real example client.
The consumers situation being that their joined Nett income of R35 850.00 was not covering their household needs and monthly debt repayment totalling R27 440.75. After doing a budget, they were shocked, needing R20 000.00 a month for household expenses. This included rates and taxes, water and electricity, Medical aid, vehicle insurance, children’s school fees, petrol, groceries, cellphone and internet contracts, life insurance policies etc. This left them with R15 850.00 towards debt, that was obviously not enough. This brings to reality what is commonly done, consumers keep making debt to cover their existing debt, creating a snowball effect.
Working with the consumers we adjusted their household budget, sometimes cut backs must take place where possible. We also brought their vehicle insurance down by moving them to Meliorleaf, specialists in insurance for consumers under debt review. Their new household budget would be R18 300.00.
I worked out one affordable monthly debt repayment of R17500.00 from their next pay day, leaving them relived and educated on the way forwards.
Reducing their interest rates and locking in the home loan and the vehicle interest rates for the term under debt review, will save them of over R65 000.00 worth of interest. It is possible to shorten your term by paying more when you can afford to.
by Casper le Grange
Registered Debt Counsellor with the National Credit Regulator NCRDC1560