Last month, the Prudential Authority of the Reserve Bank announced proposals to relax the reserve requirements for banks so that they are able to free up some of the capital that they usually have to hold as security against any loans they grant. This is especially good news for small businesses and for home-owners because it will give the banks more scope to restructure all sorts of debt, including home loans, and to advance more credit to help businesses keep going and retain their employees.
Meanwhile, all of the “big four” banks that account for most of the home loans in South Africa have already announced various ways that they are seeking to help home-owners and other borrowers, and those who anticipate that they will have trouble making repayments on their loans are advised to contact them as soon as possible.
The reason is that relief in most cases is only being offered to clients whose accounts are currently up to date. In other words, it will most likely not be offered to those who default on payments for the next month or two and let their accounts get into arrears before approaching their bank for help. Here are the contact details for the various banks should you need to take a payment “holiday” on your home loan or will be able to make only partial payments for a certain period.
The bank is offering opt-in payment relief to all customers whose accounts were up to date prior to the Covid19 crisis. This could take the form of reduced monthly payments for an agreed period or deferred payments for three months. However, interest will be capitalized for the relief period and the existing loan period will be extended, so those who are able to continue paying now are advised to do so. More details are available here: https://www.absa.co.za/media-centre/press-statements/2020/covid-19-payment-relief-programme/
FNB – Customers who need payment relief are advised to use the usual digital and assisted banking channels and a dedicated COVID-19 icon on the FNB banking app. The bank says it will be providing relief across all types of loans and credit arrangements its clients may have from 1 April to 30 June, provided they are currently in good standing. It is also offering reduced interest rates on any COVID-19 interventions and will not be taking any fees on relief measures.
Nedbank – Customers who need payment relief should call the dedicated debt relief centre on 0860 110 702 and home-owners who need help can also email [email protected] or [email protected] A comprehensive Q&A document spelling out what relief could be available and how to apply is available here
Standard Bank – Standard Bank was the first to offer instant payment relief to small businesses and students and now also has various debt relief options for other clients, including those with home loans. They can email [email protected] or call 0860 123 000 or request a call back here.
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