Defaulting on your credit agreement usually has negative consequences. Here’s a list of possible outcomes as well as a plan of action to remedy your situation.
All credit taken up must be repaid, regardless of whether you are experiencing financial difficulties. So, when you borrow money you need to be aware that taking on debt is a risk – if you cannot repay the loan, there are consequences.
Even with careful planning, you may have problems making repayments at some stage during the loan period. For example, an unplanned event like retrenchment or a disabling injury can turn this risk into reality.
It is important to act quickly if your debts seem to be getting out of control. You should contact your credit providers without delay – payment options are often available to help borrowers who find themselves in financial difficulties for various reasons.
Make sure your credit has credit life insurance – this will protect you against disability or death. Check if the insurance you have includes retrenchment cover in case you lose your job in the future.
An important element of using credit responsibly is knowing where you stand with your credit accounts. Compuscan’s http://www.mycreditcheck.co.za offers free full credit reports. On your report, you can find your account payment history, balance and instalments which can help you better manage your finances.