DURBAN - Getting all the right gifts and hosting a fantastic, relaxed Christmas week costs money - and in our struggling economy, a lot of South Africans use credit to manage the financial challenge.
December credit is risky, of course, particularly when it comes to the struggle of meeting monthly re-payments in the year ahead. But while February might be tough, most borrowers understand their limits, spend accordingly, and manage the risk successfully.
Making payments isn’t the only credit risk, however. A less obvious danger presented by festive season borrowing is what happens if the borrower has an accident and is disabled, or even passes away. In this case an already terrible circumstance can be compounded when family members find themselves forced to pay off the debt.
"Many of us rely a lot on credit over the festive season to meet all the demands on us. Regardless, it’s really important for everyone within the family to understand whether there are insurance policies in place for these loans, and how easy it will be to claim should the need ever arise," said Tlalane Ntuli, co-founder and Chief Operating Officer at Credit Life Insurance specialist, Yalu
Credit Life Insurance is often a requirement for personal loans, student loans, home loans in the affordable housing market and – for some banks – credit cards. But in the broader credit market it can be optional, and a lot of consumers aren’t even aware that such insurance exists, let alone whether they have policies in place that cover their debt.