Here is a list of the most common debt pitfalls that South Africans tend to make – avoid these and turn your credit record around, and before you know it you will be able to approach a home loans advisor to assist in applying for that bond to buy your dream home.
Here’s a list of the eight most common financial errors made by South Africans which you should avoid at all costs:
- Consumers automatically take for granted that interest rates will not go up when they buy a property – this is when they make the mistake by buying a property above their means.
- Males in South Africa often go to micro lenders to finance their “lobola” which means that traditional weddings often start off on a bad financial note.
- Having a home repossessed is perhaps one of the most debilitating things that can happen to anyone, and often people are too afraid of what the Jones’s will say; this leads to many home owners dragging their feet to move to a smaller more modest abode.
- The home that is unaffordable is usually replaced by a rental option that is just as upscale and as expensive – all this to save face!
- Using a balloon payment option to finance an expensive car is insanity, but it is done more often than not. The sad reality is that many of these individuals driving around with their expensive “balloon financed” vehicles cannot even afford to replace their tires; these cars are then traded in at a loss and in the end the car owner loses a substantial sum of money.
- Money is a taboo topic in many relationships which is only discussed once funds have run dry – it is a fact that many marriages break down to a lack of communication, especially when it comes to money.
- If you owe creditors money, random debt payment is not the way to go forward – rather put together a solid repayment plan and stick to it at all costs.
- The creditor who shouts the loudest usually gets paid first – remember to stick to your plan to ensure you become debt free in the near future.
Don’t guess what you owe in total – work out a plan, stick to it and work out what you owe your creditors in total. This way forward will ensure that your credit record is corrected over time, making you bond ready when applying for home loans.