DC DEBT CLEAR (PTY) LTD

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  • Facts About Loans For Candidates With Bad Credit

    Many of us face unforeseen problems due to bad credit from time to time and with it comes the feeling of being lost as you are not able to come out of an emergency situation.

    For those in these dire straights, there may be hope as they could still be eligible for getting the assistance via a payday loan. In this manner, you will receive the money required by you and also within a short time- span. Getting payday loan, one does not have to wait for prolonged time.

    This added advantage of such loan system is making it more popular as it is helpful for people who are need of immediate cash.

    Payday loans for bad credit

    If you are willing to know more about payday loan for bad credit, then you have come to the right place. The requirement of credit check is not there in case of payday loans. The money will be there in your hand within twenty- four hours and in some cases, it may take forty- eight hours.

    Applying for loans is not a bad exercise only if you utilise the money for a good and worthwhile purpose. This sort of loan is beneficial in emergency cases like urgent car repair, paying the amount of prescription or medical treatment, paying for your child’s education, etc. A payday loan is perfect for those situations when you need a small loan as quickly as possible.

    Get payday loan easily

    Receiving payday loans is a super easy procedure. Do you want to know the things that you have to do to get the cash urgently? You have to fill up a brief application form where you have to input your personal details like name, present and permanent address and date of birth.

    Few other essential information that you have to give in the application is informed of employment and also bank details. In today’s hectic world, everything is available online starting from shopping to online gas booking, etc. In the same manner, you can submit your loan application online.

    Applying for payday loan

    Then, all your information is individually sent to various payday loan lenders in order to check whose payment plan matches with your provided information. As soon as a lender approves the loan application, you have to visit the official website of the lender for completing any requirements if asked for. Besides providing your bank and employment information, you also need to input your permanent address proof for all sort of verification (if any). You will get the fund in your bank account.

    Payday loan’s repayment

    Your payday loan’s repayment will be done via automatic debit. The payday lender will set an account. By doing so, the loan amount, as well as the fees, will be debited automatically. Now, if you are willing to re-loan, you need not worry as you will be able to get it once debt payment is clear.

    The repayment rates can be affordable and it may prove to be beneficial if you opt for the right loan lender by going through customer reviews, customer care support, etc. Don’t you think that receiving payday loan for bad credit is one of the best means of tackling emergencies? Of course, it is!

    When to submit for a pay day loan

    Only use payday loans as an absolute last resort, rather look at other ways to scale back, earn extra money or restructure your monthly payments before taking out a pay day loan. Paying debt with a payday loan can push you into a cycle of debt that is difficult to escape.

    Our professional DC Debt Clear Debt Counsellor will help you stay on track with your debt repayments through a quick and affordable debt assessment process, if you are in need of greater help he will introduce you to the Debt Review Process. All of our debt counsellors are registered with the National Credit Regulator (NCR). Visit our page at www.dcdebtclear.co.za for more assistance.

  • What is a debt to savings ratio?

    Various money ratios indicate if your debt is at a manageable level or not. These calculations may be employed by financial institutions to determine your creditworthiness but are generally helpful to understand your finances, reduce debt and improve budgeting.

    Lenders measure your level of debt to determine your creditworthiness by calculating a debt-to-income ratio or DTI, meaning the portion of your total debt relative to your monthly income. The lower the debt, the better chance you stand to receive more credit on your next loan application.

    Similarly, a savings-to-income ratio looks at the portion of your savings compared to your monthly income. In this case, a lower rate means that you are less likely to put money away while debt takes over a more considerable portion of your income.

    A savings debt ratio is another way to show whether you’re likely to have money left over for saving after spending and servicing debt. This ratio puts into perspective saving versus credit and your ability to save money over debt-funded regular expenditure.

    Consumer debt vs saving explained

    The South African credit bureaus offer bleak statistics concerning the country’s average household debt-to-income ratio and overall savings. Before the pandemic, TransUnion data showed a high DTI of around 72% in 2019, which meant South Africans spend nearly three-quarters of their income on debt.

    On top of it all, the low 3% overall savings rate told that South Africans prioritise spending and debt over saving for the future.

    However, the pandemic may have altered these habits. According to bloomberg.com, the household debt fell for the first time in almost two decades in the second quarter of 2020 following pandemic restrictions, which affected consumer spending and savings.

    Still, the household debt to disposable income ratio jumped to 85% in the second quarter of 2020 from 73% in the first quarter of the same year. While consumer debt may decrease overall, South Africans are still battling with higher than usual debt ratios.

    Currently at the start of 2023 the increase in the interest rates across the world have lead once again to the increase of overall consumer debt and South Africa still stands to have one of the highest debt to savings ratios in the world.

    Paying off debt vs saving what is the difference?

    Accessing credit is completely normal to fund those essential purchases, e.g. a home or a vehicle, but incurring too much debt comes at the expense of a savings plan. This is why you need to be in control of your debt and learn to make sound financial decisions, such as reducing debt so you can increase your disposable income and start saving.

    Looking at your credit report and enquiring about your credit score gives you a complete picture of the various loans and credit facilities taken to date and how well you manage them. Consider this your debt portfolio. From here, finding your debt-to-income (DTI) ratio determines your level of indebtedness and, subsequently, the opportunity or savings.

    • Less than 35%: Your debt is manageable, and there is an opportunity for savings. Creditors view a lower DTI as favourable.
    • Between 35% and 50%: You need to be careful about credit and manage your growing debt—less opportunity for savings.
    • More than 50%: You may be heading to a dangerous level of debt and over-indebtedness—a low chance of saving money.

    Balancing your savings versus debt portfolio improves your savings debt ratio. For example, if you lower your DTI to an acceptable level – 30%, and your monthly expenses sum up to 50% of your income, the resulting 20% disposable income can be used towards savings or paying off your debt faster.

    Suppose your savings debt ratio is low or non-existent. In that case, it may be because you are over-indebted and cannot entertain the possibility of savings when you barely handle so many debt repayments. Pay off these outstanding debts first before focusing on savings. You may need debt counselling if you’re seriously drowning in debt.

    Debt consolidation and Money Saving

    Debt consolidation or debt review is a formal process open to indebted consumers who struggle with multiple debt repayments. Taking this step towards paying off debt helps you secure more affordable loan terms with creditors and consolidate significant repayments into one easily payable debt. It also ensures you can free up some money from your income to use for other purposes than servicing debt.

    Generally, a debt counsellor will develop a new budgeting plan, rethinking spending habits to reduce your debt-to-income. Consequently, reducing debt contributes to a higher disposable income and a lower debt-to-savings ratio.

    Therefore, your debt counsellor can both act as a debt adviser and money-saving expert. By getting debt help through debt counselling, you enjoy the benefits of freeing up cash so you can start saving money and improve your financial future.

    Our professional DC Debt Clear Debt Counsellor will help you stay on track with your debt repayments through a quick and affordable debt assessment process, if you are in need of greater help he will introduce you to the Debt Review Process. All of our debt counsellors are registered with the National Credit Regulator (NCR). Visit our page at www.dcdebtclear.co.za for more assistance.

  • How do I become eligible for debt? Understanding your Credit Report

    How do I become eligible for debt? Understanding your Credit Report

    Being debt eligible means that you satisfy all the conditions to obtain debt and receive credit from banks or financial institutions. Here’s how to find out if you are debt eligible and whether you qualify for credit, what to do if you don’t know know where to get a credit report simply follow this link, to get your Credit Report.

    What is a Credit Check?

    Whenever you apply for credit from a bank or financial services provider, the creditor will run an ITC Credit Check as part of your application process. This ITC Credit Check will access your credit records from one of South Africa’s credit bureaus: TransUnion, Experian, Compuscan or XDS.

    These records contain your complete credit profile, including previous credit applications and the amount of debt incurred to date. Credit providers use your credit status to determine whether you qualify for the credit you need (whether you are debt eligible). Furthermore, a good credit status can help you secure a higher credit limit or lower interest rates to your advantage.

    When the credit bureau calculates the credit score (0 to 999) based on these records, the bank or financial institution will know whether you can afford any more debt (high score) or are too indebted or struggling with current repayments (low score). In the latter, the creditor will likely not grant a further loan application until the borrower reduces or eliminates existing debt to an acceptable level.

    Interestingly, a credit check in South Africa became synonymous with an ITC check, a process named after the country’s leading credit bureau for many years, ITC Credit, now TransUnion. Similarly, a credit record is referred to as an ITC record. Nowadays, it simply means a credit check or credit record, irrespective of the affiliated credit bureau.

    How do I find my Credit Report or do a Credit Check?

    There are various instruments to verify your credit record. For example, you can easily request a credit check or ITC Credit Check online to find your credit status, and most financial providers will offer such a service for a nominal fee.

    However, the TransUnion credit bureau found that fewer than 5% of South African consumers use the legislation that entitles them to obtain a free credit report every year from every credit bureau in the country. This opportunity to verify and understand your credit report proves useful before you decide to apply for another loan.

    The credit report gives a good indication of your current debt eligibility and the chances of getting another loan application approved. Sadly, most consumers access this info when it is too late after receiving rejected applications for home loans or vehicle finance.

    Be careful not to abuse the ITC Credit Check feature. The number of frequent credit checks is an indication of new credit enquiries and applications. Applying too often for a loan may be interpreted as a financial struggle. Limiting how often you apply for new credit shows good financial management, and it improves your credit record and, subsequently, credit score.

    How do I improve my credit record and become more credit worthy?

    Improving your credit record is essential to become debt eligible at your next credit check and maximise the chances to have your next loan approved. Here are some things to keep in mind:

    • Build your credit record. Showing that you can manage debt well and repay a credit line, for example, a credit card or retail account is a positive thing in your credit check. It also improves your credit score.
    • Check your ITC Credit Check report for errors and negative info. Always ensure the credit report is free of inconsistencies. Sometimes, updating your profile can mean the difference between being debt eligible and not qualifying for a loan.
    • Get paid debts cleared from the credit report. Once you have paid a debt in full, the creditor must inform the credit bureau, which is then entitled to remove or clear the debt from your credit record. Similarly, if you had court judgments in the past and you paid off the debt, the credit bureau should receive either proof of payment from the credit provider or a valid court order rescinding the judgment. Ensure this debt is cleared before applying for new credit.
    • Keep up with the repayments. Missing payments or paying later than usual will negatively reflect your credit history via the credit check. Maintain your credit record pristine by repaying debts in full and on time.
    • Pay off outstanding debts. Regularly catch up with past-due accounts to reduce current debt as fast as possible and make room for loan applications that require a high credit score for approval, e.g. property loans. Start with paying off high-interest rate unsecured debt: credit cards, personal and consumer loans. Close any outdated accounts that you are not using anymore.
    • Reduce your credit ratio. This ratio refers to the percentage of the amount you still owe to creditors from the total available credit limit on a specific account, a credit card, for example. If this percentage is low, you are doing an excellent job in repaying the debt. If the rate is unusually high, you are sinking in debt faster than you can repay it.
    • Reduce high indebtedness via a debt review or debt counselling process. You have to be over-indebted, unable to afford to service your debt or struggle to make the monthly repayments. A debt counsellor will look at your current income, expenses and debt to determine the best course of action and draw up a new budget so you can manage to pay off the debt.

    DC Debt Clear Debt counsellors can negotiate with creditors on your behalf to accept a new payment plan with a reduced monthly repayment that you can afford.

    Our professional DC Debt Clear Debt Counsellor will help you stay on track with your debt repayments through a quick and affordable debt assessment process, if you are in need of greater help he will introduce you to the Debt Review Process. All of our debt counsellors are registered with the National Credit Regulator (NCR). Visit our page at www.dcdebtclear.co.za for more assistance.

  • What debt is the most important to pay off first?

    What debt is the most important to pay off first?

    When it comes to paying off debt, knowing which debts to prioritise and pay off first can save you the extra money in accumulating interest and get you closer to eliminating another of those monthly instalment burdens.

    There are various ways to get rid of debt, and in this blog, we look at which debts you should pay off first.

    Should you pay the secured debt or unsecured debt first?

    A good rule of thumb is to pay off debts according to the interest rate, starting with the loan with the highest interest rate, because a high-interest loan will add more interest to your balance as time goes by.

    Types of unsecured debt, usually consumer debts, personal loan or credit card debt, have a higher interest rate than secured debt. Secured debt examples include your monthly home mortgage or vehicle instalment.

    Considering unsecured debt versus secured debt, paying off unsecured debt first and getting rid of accumulated high interest makes sense. You save that extra interest that you would otherwise pay towards your loan.

    It is important to pay off the high-interest debt first!

    The reason for the increased interest in unsecured debt is simple. Unsecured debt does not require collateral that can be sold to repay part of the loan when the borrower defaults on the repayments. Thus it poses more risk of non-repayment to creditors.

    By comparison, secured debt uses your home or vehicle as collateral; it is safer for the bank or lender; therefore, secured loans often come with lower interest rates than unsecured debt.

    There is another huge benefit to paying off high-interest unsecured debt first, aside from saving on added interest. As you pay off these debts, you eliminate them one by one and focus only on paying off low-interest debts, e.g. your home loan and car finance.

    This is known as the snowball or avalanche method, where you focus on paying off several smaller debts by interest rate. Your credit utilisation ratio becomes much lower, too, which is good news for your credit score.

    Specifically, your credit utilization ratio calculates how much you still owe to creditors (on a credit card, for example) compared to your total credit limit (on the same credit card). The lower this percentage, the better.

    By paying off debts, you owe less to banks and lending institutions, and your ratio improves. Generally, creditors view 25-30% as a good credit utilisation ratio.

    The goal of paying unsecured debt first is to work faster towards paying off debt until you are left only with secured debt in your budget. At this point, it is easier to put a plan into action to become debt-free one day.

    This is the best way to pay off unsecured debt (credit card, personal loans)

    Despite your best efforts to reduce unsecured debt, you may struggle to manage multiple credit lines, high interest, increased outstanding balances on credit cards, and a dangerously high credit utilisation rate.

    Irregular and missed payments are also familiar with mounting unsecured debt. For creditors, this is a sign that you are heading into major financial trouble and you need help.

    Debt counsellors can take an objective look at high-interest unsecured debt to reduce the number of monthly instalments and devise an affordable repayment plan, thus minimising the risk of non-payment to financial institutions.

    Bundling all your unsecured debt together in one monthly instalment and renegotiating interest rates simplifies debt management to the point where you can confidently resume payment and eliminate bad high-interest debt once and for all.

    Our professional DC Debt Clear debt counsellor can help you stay on track with your debt repayments through a quick and affordable debt counselling assessment and if needed by introducing you to the debt review process, our debt counsellor is registered with the National Credi Regulator (NCR), get in touch with us by visiting www.dcdebtclear.co.za.

  • How to be Financially responsible

    How to be Financially responsible

    The cost of living is extremely high,  and there are many South Africans who simply don’t have the extra money to put into a savings account right now. We therefore need to seriously look at saving money by cutting costs and changing our lifestyle.

    Prioritise your wants and needs

    We need to be honest about what we want and what we need. Daily necessities, getting rid of our debt  – as well as school fees, school uniforms and stationery should be top of mind as we head into January.

    Differentiate from your wants and your needs- be honest with yourself

    There is no shame in not being able to afford something. Stop all and any unnecessary spending. Some people get into the mindset of “things are bad, I’ll feel better if I spoil myself and my kids”.

    This isn’t a good train of thought. Splurges on things that bring us momentary pleasure right now, can have disastrous consequences, as interest rates and prices are still set to rise.

    Set aside the time to collect and store all of your Financial contracts and paper work

    • Though it’s not something we easily acknowledge, the holidays are the perfect time to go through the paperwork and make a note of who you owe what to.
    • Have a look at what your interest rates for every debt is. If you can afford to, then pay back the most expensive ones (the ones with the higher interest rates) first.
    • Examine your contracts for credit and life insurance.
    • Check out how long you still have to be paying on all your accounts.
    • It is vitally important that you have a complete overview of what your finances look like, right now, so that you can get a plan in place for the new year.

    Obtain a credit Report

    Every South African consumer is entitled to one free credit report from every credit bureau, once a year. Go online, and make the effort to get yours.

    Create a monthly budget

    Drawing up a budget may seem boring, but it is a valuable tool in helping you manage your finances.

    • Don’t keep your budget in your head. It doesn’t work.
    • Rather write it down on paper, do it on your PC or use one of the many free budgeting apps available.
    • Sometimes you need your financial situation to stare you in the face, so that you can see exactly how much you are spending and possibly cut down if needed.

    Scale down your life

    • Cancel subscriptions to apps you don’t need.
    • Cancel duplicate insurances, especially those offered as a side product.
    • Check out the terms and conditions and cancellation clauses and penalties applicable.
    • Get comparative quotes on medical aids, insurance, etc
    • A roof over your head is a necessity. Paying rent in an area you can’t afford isn’t. Considering relocating to a cheaper location.
    • You need transport to get around, but you don’t need a big fuel-guzzling car, especially with the rising costs of fuel.

    Save money day to day

    • Switch off your geyser during the day. If you save R10 a day on electricity this way – that’s R300 a month that can go towards something else
    • Check how many times you are getting take-aways. Make food that feeds more people – and where leftovers can be frozen.
    • Check for specials on cellphone data and airtime deals.
    • Do your homework and find cheaper food prices. By keeping track of “specials” on various grocery stores, you can save quite a bit of money on your weekly or monthly grocery purchases.
    • We need to stop living beyond our means. If that means acknowledging to ourselves (and others) that we can no longer afford what we previously could – then so be it.

    There is no shame in acknowledging that things are tough right now. Once you identify what your financial problem areas are, then you can concentrate on finding solutions to them.