Less personal loans taken after the recession

South Africa has come out of its first recession in a generation but the effects of the downturn are still showing. According to data released by the Reserve Bank less people are taking out personal loans as the after effects of the recession place a drag on peoples personal finances. The effects of a recession can last some time after it technically finishes and credit extension has slowed down. So what can you do to protect your personal finances?

• Plan a budget
• Pay off your debt
• Don't buy on credit

As the ripples caused by the downturn spread out into the economy at large more and more folk are turning away from credit products with total loans and advances contracting by 1.05%. This shows that folks are worried about their money and less likely to get credit extended. If you plan a budget then you will be able to work out whether you can afford a personal loan or not. A personal loan is not always the solution, but can be, you just need to do your homework.

A personal loan should not be taken out to be spent on consumables but if it is taken out to pay off debt, make sure that the interest rate on the loan is less than the interest that you are already paying on your original debt. This way a loan can help you save money and to pay off your debt at a cheaper rate. If you take a loan you will be checked for affordability and a credit check will also be carried out, this is to ensure legal compliance, a loan is not free money but it can be used to save you money if done the right way.