Capitec clients who lost income may have their instalments covered – for up to 12 months
- Capitec is not offering a blanket debt holiday to clients who have lost their income in the coronavirus crisis.
- But some clients with outstanding debts can claim credit insurance, which will cover their instalments.
- Many South Africans may not even be aware they are entitled to this cover.
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Capitec clients who have lost some or all of their income as a result of the lockdown and coronavirus disaster can have their debt payments covered - for up to 12 months.
In South Africa, all credit products (like loans and mortgages) have to be covered by credit insurance, which will settle outstanding debt if you die or are permanently disabled. Many consumers don’t even know they have the insurance, but it is compulsory.
And in August 2017, new credit insurance regulations were adopted which extended the terms: since then your instalments will also be covered for up to 12 months if you become unemployed or unable to earn an income, not necessarily due to illness. Even if you aren't fired, but put on unpaid leave, you should be covered.
On Thursday, Capitec confirmed that its credit insurance covers a temporary loss of (or reduction in) income as a result of the lockdown and state of national disaster. It said that it also negotiated with its credit insurance provider for additional cover to help those facing retrenchment or forced unpaid leave for an extended period.
Capitec requires credit insurance for credit cards and loans that stretch over seven months or more.
If a client loses her entire income, instalments will be paid for twelve months, or for the remaining period of the loan, or until she can earn an income again, whichever is the shorter period.
But if the client loses 60% of her income, the credit insurance will cover only 60% of the instalments.
Unlike other banks, Capitec is not offering a blanket debt holiday
“We assess every client’s situation on an individual basis and do not believe that a payment holiday is right for every client, especially if a client can continue to pay their instalment in part or as a whole,” says Francois Viviers, executive of marketing and communications at Capitec.
Standard Bank is offering all clients who earn less than R7 500 per month a three-month debt holiday. It also gave some businesses and students a debt holiday. Absa invited some of its clients a three-month repayment holiday, regardless of the kind of loan or how much money those customers earn.
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