Although the major banks in South Africa have announced they are offering payment relief to their loyal business and personal customers suffering during Lockdown, a video has been going viral on social media in which it is pointed out that using this approximate three-month “payment holiday” (April to June) may not be necessary if you have credit life insurance cover… which, according to financial journalist Maya Fisher-French, is something that all new loans since August 2017 include.
Today – after her video went viral – Fisher-French, from Maya on Money, advised on Twitter: “You need to check with your bank if you have credit insurance but I can tell you that @CapitecBankSA and @AfricanBank cover pays the premium, up to 12 months, for clients on short time or compulsory unpaid leave where the reduction in basic income is 20% or more.”
Here’s the video in which Fisher-French shares important information for anybody who is not getting paid during Lockdown.
This is very important information. Reaaaaaally important.
Thank you Maya.
RT and share. pic.twitter.com/R6MFWth7af
— Vusi Thembekwayo (@VusiThembekwayo) March 31, 2020
Reading from an FNB document, Fisher-French says if you’re permanently employed and your employer is unable to pay you an income or is forcing you to take unpaid leave, you have a valid claim and can invoke this insurance (usually used following death, disability or retrenchment).
“Even if your job requires you to travel for example, to have meetings and you’re unable to earn an income from that, you have a claim,” she says.
FNB has confirmed that credit insurance is provided to those who qualify.
FNB said in a statement: “It is with this in mind that FNB further confirms that, as per the announcement made earlier this week, the new Covid-19-related digital application process assists customers to process credit insurance when applicable, before finalising additional cashflow relief measures with each customer.”
There wasn’t yet mention on ABSA’s page at the time of publishing. The most recent message on Wednesday informed customers struggling to meet financial obligations (because of the impact of COVID-19) that “Absa is helping to ease the burden by offering qualifying customers a special payment relief programme. The programme applies to home loans, personal loans, vehicle finance, credit cards, commercial asset finance and mortgage-backed business loans.”
The bank said customers would receive an opt-in SMS during this week or next.
Fisher-French says: “It is extremely important, before you rush off and ask for debt holidays, go first and ask about your credit insurance.” She recommends if you are genuinely not earning an income, go to your bank and tell them your situation.