Is Paying Off Your Debt Faster Worth It for SA Consumers?

Summary

Many South Africans are dealing with debt, especially with high interest rates making repayments costly. Stian de Witt, Executive Head of Financial Planning at NMG Benefits, explains the importance of paying off debt faster. When you pay off debt quicker, you reduce the overall interest charged, which saves money in the long run. This is especially true for big-ticket items like cars, furniture, and electronics, which often come with large loans or credit agreements. By clearing these debts early, you free up money for other expenses or savings. However, it’s important to balance debt repayment with maintaining enough cash for emergencies and essential living costs. De Witt advises to make a budget and prioritize debts with the highest interest rates first, while still allowing for everyday expenses. It is also useful to talk to a financial planner if you are unsure about the best approach. Managing debt well can help improve your credit score and reduce financial stress. Overall, paying off debt faster is generally a smart move, but it should be done carefully and with a clear plan.