Borrowing For Your Next

1035
borrow money

When your next is big, such as buying a car or paying for your studies, you may need to get a loan. Using your credit responsibly important. It helps with escaping the debt trap.

FACT 1 – Protect your assets

  • Protect your assets like your car or house..
  • You are liable for the total debt even if you sell the asset – it is your responsibility to repay the loan or credit in full.
  • Tips:
    • Make sure that you have insurance and that it covers the asset fully, including for theft, damage, etc.
    • Read all the conditions of the credit life insurance policy, and understand what you are covered for.
    • Look after your asset to maintain its value.

FACT 2 – Use credit responsibly

  • Credit includes credit cards, store cards and overdraft facilities and can be useful tools.
  • You can use for your needs, but you must manage responsibly so that you don’t spend it unnecessarily.
  • Tips:
    • Calculate what your purchase will cost with the interest added to see if you can still afford it.
    • Get a notification service so you can see when the account is used.
    • Check statements to ensure that you keep track of your expenses.
    • Pay more than the minimum instalment whenever possible. This reduces the amount of interest and costs you pay.
    • Always protect your PIN, and take immediate action if you think there is fraud on the card.
    • Don’t rely on credit to make ends meet when you’re in financial difficulty.

FACT 3 – Use loans wisely

  • Loans are usually taken for a particular purpose such as buying a house, to study, buying a car, etc.
  • You need to repay the amount in instalments on a regular basis.
  • Tips:
    • Check your budget every month and revise it to help you meet all your payments.
    • Make payments on time so you don’t have to pay more in interest and default fees.
    • If unable to make a payment, contact your credit provider immediately.
    • Select payment method that is most convenient for you.

Walletwise Tip

Only use credit for large purchases such as a house, car or education. Credit shouldn’t be spent on everyday items.