We all know that Janu-worry can take a strain on everyone financially but don't let Mashonisa (loan sharks) be your resort because once you are in, it is very difficult to come out. We've heard a number of stories about how things end badly between mashonisa and their clients. You don't want to be caught in that cycle just because you needed money justbefore you could get paid.

REASONS WHY UMASHONISA IS A BAD IDEA

Mashonisa is an illegal and unregulated lender that operates without compliance with the National Credit Act (NCA). Gauteng based Financial Specialist, Busisiwe Dlelaphantsi says mashonisa offer loans that don't require documents to fill out, don't check affordability and have their own interest rates. "That means you don't have to provide pay proof of income and a breakdown of your expenses. The danger then of using such lenders is that firstly because they are unregulated, they can establish their own interest rate unlike the regulated industry which uses the repo rate plus your risk profile as its bases to set up payments plan.' She says by them not looking at your affordability, they can give you a loan which you cannot pay and when you cannot pay, they increase the interest payable. "Lastly because the is no written contract between you and mashonisa, you cannot go the legal route should they demand more than what you agreed on as payment.

Here are some tips to help you manage your finances and stay away from Mashonisa

·      Use registered lending institutions.

·      Have an honest conversation about your finances and don't be in denial about your debts.

·      Get a financial helper to assist you with your financial goals.

·      Visit local banks to learn about credit offerings and benefits.

·      Have a budget and spend wisely.

·      Save, save, save.

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