Drowning In Debt? A Guide To Knowing When To Call For Help

The first thing to know about bad debt is that there is always a way out. It might seem hopeless at first, but with debt counselling, you can find a solution to even the most dire financial problems.

Various options remain open to you if you’re overindebted, such as debt consolidation or even debt review. The important thing is to never give up and to get help, as it’s never too late to start turning the ship around.

If you’re facing any of the following situations, then you should probably call for help:

Your Debt-To-Income (DTI) Ratio Is Too High

South Africans generally have a higher DTI than is considered healthy. According to Standard Bank, your DTI shouldn’t be higher than 43%. Anything higher than that, and you start running into problems.

However, recent studies have shown that South Africans have an average DTI of 62%, which is far above what it should be. Those earning in the higher income bracket—above R35 000 a month—have an even higher average DTI of 68%.

These are extremely unhealthy figures. If more than half of your monthly income goes towards servicing debt, you should get help.

You’re Using Credit To Pay For Basics

If your DTI is high, you’re going to run out of funds on a regular basis when trying to pay for the basics every month. If you frequently find yourself unable to pay for groceries, put petrol in your car, pay your child’s school fees, or pay your utility bills, then your debt levels are too high.

Many in this situation make the mistake of taking out additional credit to get through each month and pay for the basics. While maxing out your credit card, taking out small loans, or using your overdraft facility might provide momentary relief, the long-term impact on your finances can be dire, as the interest on these forms of credit is very high, costing you far more in the long run.

You’re Suffering From Constant Anxiety Over Your Finances

It’s normal to feel a little stressed from time to time over financial matters. Everyone experiences periods of financial strain now and then when faced with certain major expenses or temporary financial setbacks.

However, if you have ongoing, constant, crippling anxiety over the state of your finances to the point you can’t even bear to look at your bank balance without having a panic attack, then maybe it’s time to get help. 

Ignoring calls from creditors and suffering sleepless nights are sure signs that things have gotten out of hand. It’s not too late to fix it! Remember: There is always a way out. At Zero Debt, we offer expert debt counselling services, as well as debt consolidation and debt review, to guide you towards financial freedom and overcome your debt.

Don’t let debt overwhelm you. Contact Zero Debt today to get help and start your journey towards financial freedom.

FAQs and Answers

1. What is debt counselling, and how can it help me?
   Debt counselling is a professional service designed to help over-indebted individuals manage their debt effectively.
   It involves assessing your financial situation, creating a repayment plan based on your income, and negotiating with creditors to reduce interest rates and monthly payments.
2. What is a Debt-To-Income (DTI) ratio, and why is it important?
   The Debt-To-Income (DTI) ratio is the percentage of your monthly income used to service debt.
   A high DTI, generally above 43%, indicates financial strain and could mean you need help managing your debt.
3. How can debt consolidation help reduce my financial burden?
   Debt consolidation combines multiple debts into a single, more manageable monthly payment.
   This often reduces your overall interest rates and simplifies the repayment process.
4. When should I seek debt counselling or debt review?
   You should seek debt counselling or debt review if your DTI ratio is too high, you are using credit to pay for basic expenses, or you feel constant financial anxiety.
   These are signs that your debt may be unmanageable.
5. Can debt counselling help if I’m using credit to pay for basic living expenses?
   Yes, debt counselling can help by creating a realistic budget and repayment plan that ensures you can cover living expenses without relying on additional credit.
   This will help stabilise your financial situation.
6. What options are available if I’m over-indebted?
   Options include debt counselling, debt consolidation, and debt review.
   These services help restructure your debt, reduce monthly payments, and provide legal protection against creditors.
7. How can Zero Debt help me manage my financial situation?
   Zero Debt offers expert debt counselling, debt consolidation, and debt review services.
   These services aim to simplify your repayments, reduce interest rates, and guide you towards financial freedom.
8. What should I do if I feel constant anxiety over my finances?
   If you experience ongoing anxiety about your finances, it’s important to seek help immediately.
   Services like debt counselling can provide a structured plan to regain control of your finances and reduce stress.