NCR Tips for borrowing wisely

Top NCR Tips to Borrow Wisely and Stay Debt-Free

Borrow as little money as possible

Borrowing to fund your children’s education or a home loan can be a good thing, but borrowing for consumables such as to pay off other debt or to fund luxuries such as holidays or designer clothing can condemn you to a lifetime of debt. Only borrow for what you really need. Plan the repayments before you apply for a credit card, clothing card, overdraft, personal loan or any form of credit. Also take into consideration the interest and other charges as well as how this will affect your ability to save. Avoid paying over too many months as it will cost you more in the end.

Credit insurance. If there is, familiarise yourself with the terms of the insurance to avoid surprises when you most need the insurance.

Bezhonest.

Make sure that you honestly disclose all the information required by the credit provider. Dishonesty may cause you to lose the protection offered by the National Credit Act.

Create a monthly budget and stick to it.

Work out how much income your family earns and what your total expenses are each month. Will you be able to pay for your new debt once you’ve covered all your expenses? You should also plan for unexpected costs such as if one of your family members is retrenched. Always keep receipts of your payments, as you might need these in the future.

Start saving consistently.

Put aside at least 15% of your income every month in a safe investment. Save for your retirement as well.

Pay your debts on time.

Paying late will adversely affect your credit rating and possibly your ability to take out credit in the future. If you think you cannot meet your monthly instalments, call your credit provider immediately and try to re-arrange payments. Do not wait until you skip payments.

Prioritise your home loan.

You don’t want to lose your home.

Check your credit report regularly.

This way you’ll be able to identify any errors and correct them. Under the NCA a credit bureau must provide you with one free copy of your credit report each year from each of the eleven registered credit bureaus. Additional copies cost R20 excluding VAT each.

If you’re looking to borrow money wisely, Zero Debt is here to help you navigate your financial journey. Our team of expert consultants is ready to provide personalized advice and solutions tailored to your unique needs. Whether you’re planning to fund your child’s education, buy a home, or manage existing debts, we offer the guidance you need to make informed decisions. Don’t let financial uncertainty hold you back. Contact us today to discuss your options and take the first step towards a secure and debt-free future. Visit our Contact Us page or call us at 087 701 9665 to get started.

FAQs & Answers

1. What should I borrow money for?
Only borrow for important needs like education or a home. Avoid borrowing for luxuries or to pay off other debts.

2. How can I plan repayments properly?
Plan your repayments before applying for any credit. Consider all charges and how repayments fit into your budget.

3. Why is credit insurance important?
Check if your loan includes credit insurance and understand the terms to avoid surprises during claims.

4. Should I always be honest with credit providers?
Yes. Always provide truthful information. Being dishonest may remove your legal protections under the National Credit Act.

5. How do I create a budget that works?
Calculate your family income and total expenses. Always budget for unexpected costs and keep proof of payments.

6. How much should I save each month?
Aim to save at least 15% of your income. Make saving for retirement a consistent part of your plan.

7. Why is paying debts on time so important?
Paying late damages your credit record and may affect future borrowing. Rearrange payments early if you cannot pay.

8. How often should I check my credit report?
Check it at least once a year for free to correct errors and keep your financial record accurate.