BAD CREDIT LOANS IN PRETORIA
Don’t let Bad Credit stop you from continuing your life, Move forward and take action
Bad debts and impairments on loans to debtors are critical figures in analyzing consumers’ credit expenditure as well as those extending credit to customers. A new proposed standard that is set to be imposed in Pretoria for the recognition of bad debt losses and impairment is necessary to address the criticisms of ‘too little, too late’. The recent proposals issued by the International Consumer Purchasing Standards Board (ICPSB) indicate that consumers will need to re-examine how they schedule repayments for bad debts. Su Little, project director of consumer purchase behavior reporting, in the nation’s capital, at the South African Institute of Chartered Accounts (SAICA) says that the model proposed for bad debts or credit losses is a more forward-looking impairment model than at present that will not only potentially result in the recognition of larger credit impairment losses, but would also recognize such impairment losses earlier. “For this market to understand the fundamental reason why consumers fall into bad debt, we have to unpack and recognize the role of the creditor in an environment where the need to approve credit precedes the glaring truth about the average consumer’s credit status,” she states, adding that for creditors without a significant financing component, lifetime expected losses have to be applied on initial recognition and throughout the life of the asset (credit).
This fundamentally changes the thought process for providing for bad debt losses as the current standard allows one to provide for a bad debt loss when an impairment/loss event has occurred. The new approach is more subjective. In today’s era of fierce competition, more and more companies in Rustenburg are offering “free” goods or services as incentives to customers in order to boost sales. These contracts inevitably have a degree of financing associated with them – and therefore will be included in the scope of the proposals. Banks, financial service companies and some retailers in Pretoria that offer payment terms will be most affected by the proposals whilst companies in other industries will be affected to a lesser extent. According to Raisibe Moroka, Nedbank’s Chief Financial Officer, the requirement to integrate future looking economic forecasting into stronger preventative models could prove to be difficult. The difference between the outlooks and the policies adopted by the various industry role-players could lead to vastly different results. The transitioning between the various categories of performance of the loans could drastically affect the financial performance reported by a company. Banks and financial service companies who already report under the Basel II Advanced Internal Ratings of the Gauteng Province approach will be less affected – although the education of all investors and users of the financial statements will be considerable.
Moroka explained that a performing loan requires a 12 month expected loss to be provided whereas a loan on the watchlist requires a full lifetime loss to be provided. The results of banks and financial service companies could therefore vary greatly depending on their outlooks on the economic cycle. If company’s view of the future economic outlook is positive this may lead to a significant reduction in expected losses due to the migration of large portions of the book from lifetime losses to 12 month losses without a commensurate reduction in risk and vice versa during a negative outlook. Ludolph adds that the forecasting of a lifetime loss could prove difficult when companies have to forecast what the future economic conditions will be and the likelihood during that period that a debtor may default. Many companies currently do not have the systems to obtain the data required to produce such future looking forecasts. She strongly advises companies in Pretoria to review the proposed standard and conduct their own field testing to understand the resources needed to implement the proposals relating to bad debt provisions for debtors and other financial assets.
If you have a bad or low credit score and you are needing to take out a loan, we can only imagine the amount of stress that you currently find yourself under.
Well, we want you to sit back, take a deep breath and relax, because there IS a solution to your situation.We understand the amount of responsibility and stress-load that comes along with being in this situation as it can lead up to many things going wrong.Lucky for you, there are places out there that can cater for your needs and help get you out of your financial rut you currently find yourself in.Not sure what exactly we are talking about? Bad Credit Loans in Pretoria is a real thing and it might just be exactly what you need!
Before we get into the details, you must first understand that when it comes to bad credit scores, you can be categorized into one of the following two:
● First – this is when you have been active in the credit market, but due to unforeseen circumstances such as losing your job, your accounts are no longer up to date. Although this might not be your fault, you still cannot apply for a loan anymore.
● Second – if you have never been active in the credit market, there is nothing to measure your credit on.
As you can see, there is a rather big difference between the two, yet there is a solution for both!
So, whether you haven’t been paying your accounts or whether you have never paid one before, we want you to know that it is still very possible for you to apply for that loan that you need,
Without further ado, let’s get into the details of bad credit loans in Pretoria.
What is a Bad Credit Loan?
A bad credit loan is a personal loan that is offered to those who have a very low or bad credit rating.
These loans can be offered to you by banks, credit unions as well as online lenders.
Although they do help you in the long run, they can also work out to be very expensive. The reason behind this is due to the fact that lenders charge higher interest rates to borrowers with bad credit than they do to borrowers with good credit.
Although this might sound off-putting seeing as though you are already having trouble with your financials, the reason is pretty simple – you are regarded as a high risk customer who might default and leave the credit provider struggling to collect the loan repayment.
As you can see, the reasoning behind this is very valid.
So, it might seem to you that taking out a bad credit loan might not be the best way to go about this, but at the end of the day this is one of the best ways to rebuild your credit score up to a good one.
If you fall into the category of someone with a bad credit score, we can highly recommend a bad credit loan to you.
Once applied and approved, the best way to go about it is to pay off smaller amounts over a longer period.
This way, your financials won’t be taking too hard of a punch and hopefully you will get your score back up to tip top shape.
If you have a very low credit score and are looking to take out a loan, we think it is best if you build up your credit score first.
No major steps need to be taken in order for you to do this. It is as simple as keeping up with your payments and accounts that you currently have or if you don’t have any, the easiest way to start out is to open an account at a shop such as Woolworths. Buy something on credit and then pay it back monthly.
As you can see, there is always a way around everything! So, before you let stress take over, do some research and you will find endless solutions.
There are many companies that do bad credit loans in Pretoria and we hope that you can find the one that is just what you need!