Hypothetically, If you had an extra sum of cash, lets say R 20 000. What would you do with it?
New clothes? (possible) Holiday? (sounds good) Pay off some of your bond?
The last one is the most unlikely to be the one that happens but it should be the first one that comes to mind. Not to say that you have to be ‘sensible’ with extra cash you have but there are long term positives to being at least a little sensible.
The interest* you are paying on your overdraft is 15% (often more) and the interest earned on your bank account (if you are lucky) is 5%. There is 10% MORE interest* that you are paying than you are receiving! If you have any ‘left over’ money – pay the overdraft off and pay less interest every month.
*The numbers quoted here are for illustration purposes only, please contact us or your bank to get accurate interest rates. Early settlement of loans may incur charges, please contact the bond originator to ensure the details.
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