Earlier this week, the South African Reserve Bank (SARB) announced a further one percent drop in interest rates. This is good news if you have debt, as it means you pay a smaller amount of interest. This, in turn, brings down the overall cost of your home loan, credit card debt, and other debt you may have.
While all of South Africa’s major banks have also introduced various measures to assist consumers who are impacted financially by the national lockdown, such as payment holidays, it would still be advisable to pay off your debt as fast as you can.
If you are in a position to do so, continue to pay off your debt as if the interest rate change has not taken place and only take up payment breaks if absolutely necessary.
Paying off a loan faster means that you’ll save on the amount spent on interest.
It is also advisable to pay off credit with higher interest rates first. Retail accounts and credit cards often have high interest rates when compared to other loans.