How to avoid the festive season debt trap

Cape Town - Consumers thinking of taking out a loan to fund additional expenses over the festive season should weigh up the financial consequences carefully, cautioned Izwe Loans CEO Rayanne Jacobson.

The cheapest loan may not be the cheapest a few months down the line. That makes it critically important to opt for the right type of loan as your choice will have a significant effect on cash flow over the next few months, warned Jacobson.

“The first consideration is whether you will be in a good position to pay back the loan. If you are on a very tight budget, there may be a case for holding back on a holiday, expensive gifts or a lavish Christmas meal,” she said.