The covid-19 pandemic that unexpectedly started hitting the world at the end of 2019 has left more consequences than citizens usually are able to acknowledge. It has affected every fabric of society in every nation, their economic decisions, their social spheres, educational systems, health systems and more. The effects brought are still being shown, and many processes that were in place before Covid hit us were accelerated by it. There has been social unrest and many differences between people and nations have been accentuated.
Nowadays, in South Africa, salaries are not keeping up with inflation and the fact that over the past years the world has been dealing with the consequences of a pandemic, and the sanitary decisions made to protect individuals, which has left no nation behind is of no help. In South Africa, as a consequence, many citizens are looking for other ways to make ends meet and to continue living their lifestyles. In the past six years, the applications of loans had been increasing, by now they have increased 45%, which shows that this is one of the measures taken by individuals looking for relief. In some cases, people take on more debt that they can pay, and this embarks them in a spiral of payments and unpaid debts, showing a rising inability to meet the charges owed.
Among the different loans that are offered, personal loans are one of the most popular. This borrowed money can be used for a number of different purposes like expenses that appear suddenly or for purchases which involve a great amount. This is one of their most well known benefits, they can be acquired because of many reasons and many lenders will not even ask what you are planning to do with the money. Another benefit they offer is that many are unsecured, which means that lenders do not require anything of value, mostly vehicles or investments, to be offered to provide the loan, collateral shows that whoever is incurring into debt intends to pay it back. Of course there are also some cons that come together with this type of loans, for instance interest rates that are very high, that is why it is not a decision to make lightly.
Many people choose personal loans without the previous research needed to make the decision of going into debt in a wise manner. Among the many other aspects that have to be taken into account, we can find personal requirements to be met. There are also different options to consider that would best fit individual and specific needs. Debt counseling is available for citizens (see here) if they wanted to seek professional help before making a definite decision. A further example of a concept that is important to get to know in advance is debt-to-income-ratio, necessary to reach an informed resolution. This term makes reference to the ability you will have to pay your debt relating your monthly income to your debt payment every month.
All in all, the need to seek financial help has always been there. Loans are a firm solution if caution is exercised, after carrying some research or professional help to make the right choices. In South Africa a tendency is seen as regards this in the past 6 years, shown in the 45% increase proved, and it is likely to continue.