Capitec clients, who have lost some or all their income as a result of the global pandemic and lockdown, can have their debt instalments covered for up to 12 months — this according to Business Insider.
All credit products have to be covered by credit insurance, which will settle the outstanding debt if you die or are permanently disabled.
In August 2017, new credit insurance regulations were adopted which extended the terms. 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 in unpaid leave, you should be covered.
Capitec announces credit insurance cover
On Thursday 9 April, Capitec confirmed that its credit insurance covers a temporary loss of (or reduction in) income as a result of the lockdown and national disaster. It said that it also negotiated with its credit insurance provider for additional cover to help those facing retrenchment or 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 their entire income, instalments will be paid for twelve months, or for the remaining period of the loan, or until they can earn an income again — whichever is the shorter period.
But if the client loses 60% of their 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,” said the executive of marketing and communications at Capitec Francois Viviers.
Credit insurance the answer to troubled lockdown finances
Fiscal expert Maya Fisher-French shared some vital information with South Africans online, suggesting that credit insurance can help bail out citizens across the country.
“It’s bizarre banks aren’t talking about credit insurance. You shouldn’t have to take a debt holiday. Since August 2017, all approved loans have an extended “credit life”. But, according to FNB, If you’re permanently employed and your workplace cannot pay you – or you have been forced to take leave – you’ve got a valid claim,” she said.
“Even if you need to travel for meetings and can’t now fulfil those obligations, you have a claim. So don’t ask for debt holidays yet. Go to your bank, let them know your income has stopped, and ask for your credit insurance to be invoked – it is in place to pay your premiums for up to 12 months. Please, go and check those policies now.”