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In our previous post, we covered the basics of a loan and specifically personal loans. In this post, we'll recap the basics of a loan and tell you a bit more about pay day loans!

In our previous post, we helped you understand Debt Review a bit more. In this post we're going to show you the debt review process.

Debt review, also known as debt counselling, is a debt relief measure created in terms of the National Credit Act (NCA) to assist consumers that are over-indebted. This is done through budget advice, restructuring of debts and negotiating with creditors.

If you’ve been blacklisted, it doesn’t automatically prevent you from being able to access a loan. Some lenders do accept blacklisted clients. It’ll just take a little know-how and we'll give you a foundation to work from in this article!

Many of us walk around with a cost mentality, often dropping our heads in a sorry attitude when walking past things we cannot afford. What if, you get to spend money and pay off your loan, at exactly the same time? Yes, you’re not seeing double, it’s possible!

The credit bureaus in South Africa perform an essential role. They are necessary for a fair and reasonable credit market. According to the National Credit Act they are

Duplum means double, or perhaps double the trouble in the case of interest on loans. Literally translated, in duplum means 'double the amount'.

The National Credit Regulator, known in South Africa

The term ‘blacklisted’ is used to classify people who have a bad credit profile. While everyone understands the term, there is actually no blacklist. It’s randomly used

Be an attractive borrower that doesn't cause a debt crisis

Most South Africans inevitably get to a point in life where they face financial shortfall and are thus forced to become a borrower as a temporary solution. While you won’t be judged for borrowing money, your payment activities reveal a lot about your habits and your personality. You can’t foresee what unexpected financial events will happen to you in the next few years, but there are some things you can control: planning your finances and setting up a worthwhile goal. Too many South Africans ignore this planning phase and contribute to the dangers of a debt crisis looming ahead in 2016.

Read on below for some essential qualities that make up a good borrower and see for yourself how you stand:

Timely

A good borrower is one that knows what their debt obligations are, they are responsible enough to pay on or before their due dates, without having to be reminded. Timeliness is a precious quality, not just in debt repayment. Punctual persons are committed to their goals and are intent in completing their tasks, rather than rushing within the last few minutes. These people are more likely to succeed in their financial goals and in life.

Keen money management skills

This includes a solid understanding of one’s cash flow and the ability to live within your means. The skill of keeping accurate and timely financial records is vital for obtaining a loan as banks and other lenders will require not just proof of income, but proof of residence, marriage, and ownership of assets.

A sense of frugality

Good borrowers don’t bite off more than they can chew. They only borrow what they can repay and know whom they borrowed from. Most borrowers are not done in by the size of their debts, but by the sheer number of them, they get loans from too many sources and then juggle money to repay creditors. Ideally, one borrows from a single source at a time.

Purposeful spending

Perhaps one of the best indicators of a successful borrower is what you ultimately do with the extra cash at hand: is it going to provide you with greater value, or is it going to burn a bigger hole in your pocket? Thus, you must be clear about your financial goal: borrowing to take care of an unexpected expense or the purchase of a once-off big ticket item such as a house or a car.

Integrity

This means you walk your talk and you honour your agreements. If you borrow a certain sum of money, integrity means paying back the agreed upon sum on time. Keeping your word is the basis of all financial agreements and is often the most overlooked trait. The lack of integrity is the main reason for a long history of lost wealth and damaged relationships with lenders, both business and personal. Borrowing with integrity surely makes you a trustworthy borrower.

Here at Fincheck, we wish you a super and money-wise 2016, with a debt crisis diminishing with every smart financial decision made!