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News24 | Sponsored | PODCAST: Understanding how credit qualifying works

old mutual, debt, finance, south africa

Summary:

Head of Collections and ECM Strategy at Old Mutual Finance, Senzo Lubisi speaks to Motheo Khoaripe about the Credit. What is credit? What is the cost of credit?

In this episode of the Old Mutual Finance Podcast Series, Senzo Lubisioutlines the information credit providers consider when evaluating credit applications, including living expenses, existing debt obligations, and net disposable income. He stresses the importance of honesty from consumers and doing research to find the best credit product that suits their needs and affordability.

As well as:

Interest rates, fees and loan terms - how these influenced by factors like the type of loan, creditworthiness, and prevailing market rates. Senzo further provides insights on choosing loan terms, considering factors like the repayment period and overall costs.

Credit life insurance and contingency planning - Senzo highlights the importance of having a contingency plan, such as credit life insurance, to cover loan repayments in case of unexpected life events like unemployment, disability, or death. He explains how credit life insurance works and how it can protect borrowers and their families from being burdened with debt in such situations.
Repayment options and seeking assistance - Covers various repayment options available to borrowers, including paying the minimum instalment, making additional payments, or opting for payment arrangements or restructuring. Senzo emphasizes the importance of communicating with credit providers as soon as financial difficulties arise.

Take Outs:

1. Understand the reasons for seeking credit and ensure it aligns with your needs and affordability

2. Maintain a healthy credit score by responsibly managing existing credit products and debt obligations

3. Research and compare different credit providers and products to find the best fit for your requirements and financial situation

4. Be honest and transparent when providing information to credit providers during the application process

5. Consider taking out credit life insurance to protect against unexpected life events that could impact your ability to repay the debt

6. Explore different repayment options, such as paying extra or opting for full repayment, to reduce overall costs and interest charges.

Old Mutual loan offerings are made available through Old Mutual Finance (RF) (Pty) Ltd, a licensed Financial Services and Registered Credit Provider NCRCP35. Terms & Conditions apply.