Good money management doesn’t only mean building up savings to meet your goals, it’s also about being able to use credit responsibly to help you achieve your goals.

Emma Mer, CEO of FNB Personal Loans. says the average South African adult can relate to a situation where they require access to money to solve for a specific need and a personal loan is often the ideal product because of its structured repayment term and ease of accessibility.

“Whether it’s to cover a shortfall in your child’s education savings, to take care of medical and family emergencies or to top up savings for your special wedding day – we all know about significant life events requiring access to money,” Mer says.

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She says that personal loans play an important part in the life of South Africans. However, she also reminds us that “every consumer has a duty to manage their personal loan responsibly in order to keep their finances and creditworthiness intact.”

Borrowing for everyday expenses or luxury items is not a wise decision. It’s better to save up for such items and to manage every day expenses carefully within a budget.

Mer provides the following useful tips to help you become “credit smart”:

  • Borrow from a trusted provider: It can be very enticing to have credit providers offering you deals, but be very selective about where you borrow money. It’s safer to borrow from a bank, as they are governed by strict industry rules.
  • Do not over-extend yourself: This is where financial discipline becomes important. Avoid the temptation to borrow more than you require, as this could have a negative impact on your disposable income and your credit record if you are unable to repay.

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  • Choose a personal loan amount and repayment term that makes your instalment manageable: The term you choose to repay your personal loan is important, as it directly impacts your monthly instalment. Make sure you can afford your repayments. Should you be able to pay off your personal loan early, FNB will not charge you any penalties.
  • Pay on time: Paying your personal loan on time is important in order to keep a good credit record, which determines your ability to get credit in future.
  • Pay by debit order: Paying via a debit order is one of the easiest, most reliable and cost-effective ways to meet your repayment obligations.