Credit: Is it Right for You?

Growing up, we are told to shy away from credit, to stay debt free, and to not purchase what you can’t afford. While in many cases this holds true, in our current society you will almost always need some sort of credit to enable self-growth. It also provides a safety net to cover against emergencies and unforeseen expenses like hospital bills or car repairs.

With that said, it is critical tounderstand the amount of credityou can realistically afford. Remember, credit is not free. It is aproduct, and just like any other product you buy, it has a markup.

So, if you’re thinking of taking out a credit product, like apersonal loanor credit card, how do you know if it is right for you? Let’s breakdown the answers in this post.

Credit: Can you repay it?

Taking outcredit has great benefits. For one, it gives you the ability to ease any cash flow burdens, but it is not indefinite. Credit needs to be repaid, and it is essential to understand if you canrepay your debt. In the ConsumerFinanceindustry, we see overextension (when you have more debt than you can repay) far too often.

Overextension, and the inability to repay your own debt, isn’tbeneficial when using credit. As an overextended customer, you will constantly be searching for an alternative source of funds to repay all your previous debt and will therefore end up in a debt spiral. This may result in admission to adebt reviewprocess where your ability to access funds is severally restricted.

This is just one question to ask yourself when it comes to thinking about whethercreditis right for you. Here are 6 morequestions to ask before lending money and credit.

Credit: Can you make the right decisions?

Here are sometips to help you make better creditdecisions:

1. Ask yourself why you are taking thecredit? Will it help you progress with a major purchase like a car or home? Is it for an emergency?
2. Make sure tobudgetaccurately before taking out credit and assess the likelihood of your ability to repay the credit given your specific set of circumstances.
3. There is nothing wrong withusing creditto purchase an item that you’ve had your eye on if you can afford the repayments! Remember, credit is a mechanism to ease cashflow and to grow.
4. Look at yourcreditrecord before deciding on taking new credit. This will allow you to see your credit history andcredit score. You can create a profile for free with our partner,ClearScore.
5. Don’t take outcreditand waste it. Use it for a worthy purpose; takingcreditshould never be impulsive and should be carefully considered.

Click the video above to learn more about what you can use apersonal loanfor.

Credit: Can you manage it?

Credit – whether it’s personal loans, mortgages,credit cards or vehicle finance– is an amazing mechanism to help you cope with high once-off costs that you ordinarily would not be able to afford and spread the costs over a period.

For example: first-time homeowners rarely have the opportunity to purchase property without the assistance of credit; individuals who are looking to purchase a vehicle can’t easily afford a cash purchase given the high value of motor vehicles; school textbooks which need to be purchased once a year can be a massive financial burden to households who are putting their young ones through school.Credit allows you to have all of these things, and other items that you need.

Tips to help you manage your credit include:

• Know how much you will owe.
• Make sure you pay back yourcrediton time (check your Agreement on the date you agreed to make payments).
• Pay back, at least, the minimum amount.

In conclusion

With the right attitude and financial awareness, you should never be afraid ofcredit. It is there for individuals to use but always make sure you use it wisely. If you are ready to take out a credit product, check outwww.fasta.co.zato learn more about getting access to credit of up to R8000.