Wealthy South Africans are not immune to the high interest rate environment, and it’s hitting some of them hard.
Wealthy South Africans have the highest levels of debt and are currently spending, on average, R21,700 per month on home loans, vehicle finance, credit, and other forms of debt.
Eighty20 highlighted that these South Africans, with a take-home pay of about R42,100 after tax, have unsustainable levels of debt in the second quarter of 2024. Eighty20 pointed out that households in this group spend R21,700 on home loans and vehicle asset finance. Standard Bank advises that if your debt-to-income ratio is higher than 43%, you should consider strategies to reduce your debt.“In our experience, if the ratio of debt repayment to net income is over 30%, the consumer is in the danger zone. If it’s over 40%, then their financial situation is not sustainable, regardless of the type of debt they are repaying.”
What’s worse, DebtBuster mentioned that people in this income bracket have the highest number of individuals who believe they don’t need debt counselling—over 73% of them, to be exact.
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