PRESS RELEASE FOR EDULOAN
ISSUED BY KEZI COMMUNICATIONS
FOR IMMEDIATE RELEASE
12 JULY 2010
For many South Africans, creating unnecessary, out-of-control debt spells trouble and they are right: creating debt that you cannot afford to pay back can result in major financial problems. But, debt – the good, controlled and sensible kind – does not have to result in the crisis situation that you imagine it to be. In fact, creating good debt can set you up for the future, giving you a lump sum of money when you need it most. Ultimately, debt will have a substantial impact on your financial life – the impact can be positive or negative, depending on how you plan to manage it.
What is Debt?
Debt is actually uncomplicated and most institutions work on the same principles. Debt is the amount of money you have to pay back to the person or institution (such as banks, retail stores or micro lenders) from which you borrowed. This amount consists of two parts – the actual borrowed amount (also known as principal debt or capital amount) and interest. The debt is usually repaid in instalments (the minimum amount you have to repay every month) and can be done on a monthly, quarterly or annual basis. The nature of the instalments has a huge impact on the amount of debt you repay and it is definitely advisable to repay your debt on a monthly basis. The amount you repay will be substantially less than if you were to pay on a quarterly or annual basis, the reason being that each instalment reduces the capital amount borrowed, which then has the effect of the subsequent interest being calculated on a lower amount.
The Advantages of Good Debt
If approached in the right way and with the right frame of mind, debt can assist you in achieving your goals and dreams. The reason why debt has a negative ring to its name is because thousands of people lose all their possessions every year due to poor management and control over their debt. This is mainly because they incurred too much debt and cannot afford to repay the instalments.
However, the situation of losing all your belongings because of overspending can be avoided entirely if you plan and manage your debt carefully, and if you incur debt for good reasons. Good reasons for incurring debt include:
- Buying an affordable house/apartment – it is an asset that can increase your wealth.
- Buying a really good bargain – if you can afford the debt. This happens when the reduction in the price of a product exceeds the interest you will have to pay if you borrow money to buy the product.
- Incurring debt to earn an income, such as for studies.
- Repaying your debt on time will help you to build a good credit record. Creditors will then be more inclined to grant you more credit if and when you need it.
In line with the National Credit Act of South Africa, which came into power on 1 June 2007, consumers are protected against illegal and reckless lending behaviour. There are several rules to see to it that consumers don’t take on too much debt and also ensure that they don’t pay too much (interest and fees), for the credit. Thus, incurring debt can be and is a safe and sensible way for you to reach your goals or to provide a better future for yourself or your loved ones.
Eduloan is South Africa’s exclusive education fund enabler, bridging the gap between employers and South Africans wanting to study further. Through partnerships forged with government, corporates and South Africa’s tertiary education institutions, Eduloan facilitates the automatic deduction of study-loan repayments directly from the salary of its students or their sponsors, over to their institution of learning. By offering bespoke and affordable loan agreements to its students, Eduloan is focused on empowering South Africans through learning, in so doing building a globally competitive nation by creating access to further education.
Through the management and dispersion of study loans and the addition of a unique educational fund management programme, Eduloan assures the provision of funds for education are more efficiently and successfully managed. For more information, call Eduloan’s Client Services Department on 0860-55-55-44 or visit www.eduloan.co.za.
Editorial contact:
Jessica Wheeler
KEZI COMMUNICATIONS (PTY) LTD
Cell: 072 731 7691
Tel: (011) 616 1860
jess@kezi.co.za
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