The Covid Pandemic has brought its fair share of challenges in many people’s lives and altered the way businesses operate. Be it salary cuts, collapse of businesses or loss of jobs, things have changed for the majority. As expected, many people have gotten deeper into debt as they come to terms with the new norm.
At Lipa Later, we encourage our customers to be responsible with their debts as it impacts their future access to meaningful debt.
Here are some tips on what to do:
- Assess your Income Flows against your Expenses
Clearly outline your income streams and their frequencies (daily, weekly, monthly etc). Then indicate your expenses with their frequencies as well. Every amount spent needs to be recognised to get a true picture of your position. In simple terms, have a budget.
- Prioritize your Expenses and Debts
Starting with the important bills (e.g rent, food, transportation costs, etc) to the less urgent ones. Identify what expenses you can do without. This will help you unlock amounts that you can channel towards repaying your debts. In the same way, identify the most important debts by categorizing them into Assets and Non- Asset Debts. Asset debts are those that are tied to assets like Motor Vehicles, Mortgages, Furniture or Electronics while Non- Asset debts have no attachment to assets like Student Loans. In this manner you can prioritize what debts to sort out first and how often. However, it is important to note that both Asset based and Non- Asset Loans affect your ability to borrow in the future by impacting your Credit Score.
- Talk to you Financier about your situation and ask for the available options
Ask for a payment plan that suits your current situation. Most Lenders extend a flexible Loan restructures to accommodate their clients. The idea is to ensure that you continue facilitating the Loan regardless of your ongoing situation. At Lipa Later, we offer payment restructures including other options such as penalty waivers and interest discounts depending on the facility.
- Give a payment plan that you are sure of actualizing
The best way to manage your debt is to be honest with your Lender and keep communication ongoing. If you have agreed on a payment plan, sticking by it will ease the possibility of repossession/ auctioning where applicable. In case of any unforeseen changes, communicate with your Lender and have a discussion on what else can be done. Avoid making false promises.
- Automate Payments
You can place a standing order with your bank to ensure that the agreed payments are not missed. This also reduces the possibility of using these amounts for other purposes.
In today’s economy, living without debt seems out of the question. The most important question is if it is a good or bad debt. As such, our aim at Lipa Later is to improve the lifestyle of our clients in a flexible and affordable way.
Pay off your debts first. Freedom from debt is worth more than any amount you can earn.” Mark Cuban. To increase your credit limit with Lipa Later, it helps if you are on track with all your payments. This way, you get to shop for more items you need and settle your payment over flexible and affordable monthly installments.
- Brian Nyakundi, HOD Collections Department.