Nominal revenue declined somewhat in the first quarter of 2022 two years after the outbreak of the coronavirus pandemic. When inflation is taken into account for six years, South Africans have 31 percent less disposable income in actual terms.
Founder and CEO of DebtBusters, Benay Sager, believes that people are borrowing to compensate for a lack of genuine income. Debt counseling queries increased by 32 percent in the first quarter of 2022 compared to the same period last year.
More than half of individuals earning more than R20,000 a month have unsecured debt levels that are unsustainable.
Consumers must set aside 62% of their income to pay down their debts as a result of the rising cost of borrowing.
Higher-income households' debt-to-income ratios have risen to their greatest levels in the last six years. For individuals earning more than R10,000 a month, the percentage is 125 percent, and for those earning more than R20,000 a month, it is 150 percent.
Because of their heavier debt loads, Americans spend 62% of their income on debt payment.
Furthermore, it is alarming that the top two income categories' debt-to-income ratio is at its highest level in the past six years. For individuals earning more than R10,000 a month, the percentage is 125 percent, and for those earning more than R20,000 a month, it is 150 percent.
DebtBusters pointed out that this shows that less and fewer people are getting unsecured loans.
New applications 45 and older have climbed from 19 percent to 24 percent over the past six years, indicating that financial stress is becoming more widespread in this demographic.
Deficiencies in what they owe money.
However, the Debt Index reveals that the nature of the debt is steady, with the exception of a growing amount of the debt coming from financed vehicles. Debt relief organizations are seeing an increase in the number of customers who have assets, such as cars.
In the last year, the percentage of unsecured debt in the nation's debt has risen by 7 percent, from 66 percent to 66 percent.
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