People obtain credit for various reasons. It can be that you want to afford that nice car, or to study so you obtained a loan. Or that you obtained a credit card because you had no funds and needed access to money.
Whether your credit account is a cellphone contract, clothing account, credit card, car finance, personal loan or even a home-loan debt according to TransUnion’s inaugural Industry Insights Report which is based on the company’s dataset of over 23 million South African consumer credit records.
These are the three types of debt South Africans are paying off right now:
TransUnion’s new report found that home loans the credit product with the highest total balances outstanding also had the lowest serious balance-level delinquency rate in the most recent quarter.
As of Q3 2018, home loans comprised 1.84 million accounts and R888 billion in total balances.
Vehicle and asset finance
South Africans love their cars. TransUnion noted that vehicle and asset finance (VAF) loans the credit product with the second highest total balances experienced a 50-basis point year-over-year rise to 4.1% in Q3 2018.
Approximately 2.5 million VAF accounts were open with total balances of R414 billion.
A big culprit in why most people obtain credit in the first place, some people obtain a credit card as young as 18 years old.
Learning to become more prudent with your purchasing decisions and personal spending habits is vital, also having set up an emergency fund. As many consumers who don’t have funds available for emergencies find themselves having to borrow, with the exorbitant charges this entails. Avoid using credit for day-to-day essentials. This is an indication that you’re living beyond your means