Who Defaults On Their Debt Repayments?
Credit Bureaus and the NCR like to track who is and isn’t paying their debts. They regularly report on how much money the 14.2 Million consumers owe and which of the 17.9 million active accounts are behind on payments.
Combined South African credit users owe R1.52 Trillion.
Some consumers are more likely to pay than others due to various shifting economic factors. At the same time, one of the main figures to watch is who is defaulting for the first time ever and why. This is a figure that many credit bureaus track (Like Experian who recently released a report on the topic).
‘Overall, defaults are slightly down over years past’
Overall, defaults are slightly down over years past. Slowly things have shifted in a positive way (if hard to notice). This may have to do with a number of factors such as the credit providers tightening their lending criteria, legislation forcing credit providers to have a closer look at consumer applications and affordability and also consumers just not being able to get more exposed to debt.
Who Are Most Likely To Default?
Low income, mostly unemployed young families who share homes in densely populated areas were the poorest payers, in general, and most likely to start to default on credit last year.
Also, families living on minimum wage and working in rural areas in the Northern Cape and Free State were the group of credit users who recently began to default on credit the most.
Middle-aged, educated families who live in the suburbs around industrial and mining areas recently showed a marked improvement in repayments and not defaulting as did young people who are totally reliant on social grants for income.
When it comes to paying off vehicle finance it was the young employed single room renting landlords who were the most likely to have started to miss payments as they overextended themselves last year.
Last year, consumers tended to pay back their homeloans and credit cards more so than their personal loans (which stayed the countries worst repaid credit product again). This is pretty consistent with what has happened before although in recent years consumers have begun to default on vehicle loans (and rather paid for other credit) more so than in the past.
Though there has been some improvement in the stats across the industry it is clear that consumers remain under debt stress or overindebted with almost half of all credit users still several months behind on at least some of their accounts.
If you are experiencing debt stress and struggling to repay your creditors and still buy groceries and care for your families needs then you probably qualify for debt review.