Capitec offers interest refund on Covid-19 payment holiday
Capitec, SA’s sixth largest bank by total assets, said it will give a three-month, 100% interest loan refund to its clients who took a repayment holiday, as consumers buckle under financial pressures brought on by the coronavirus.
The interest refund will be available to all clients who have taken up the bank’s Covid-19 payment break or rescheduling relief plan between March 27 and June 30 2020, Capitec said on Monday.
Capitec, along with other major lenders, has introduced debt relief measures for consumers since April, mostly for three months, when the country was forced into a lockdown to combat the rapidly spreading coronavirus.
While payment holidays offer clients the temporary financial relief needed during this time, loans still incur interest, which increases the total cost of credit.
The move would affect about 20% of the bank’s credit clients, Capitec said stating that it would look at the individual needs and the financial wellbeing to determine whether a payment break should be granted.
“We want to help them as much as possible during this time, which is why we will waiver the interest accumulated during the first three months of the relief period, provided they are in good standing and continue to meet their loan repayments,” Capitec CEO Gerrie Fourie said.
Clients would need to honour their loan instalments to qualify for the interest reduction. Six months of paid-up instalments would result in a 50% interest reduction.
“The interest refund will help clients to recover faster. ... This is another way we are helping our clients to live better. The interest refunds not only ease the financial pressure on our clients but encourage good financial behaviour by rewarding clients for meeting their loan repayments, which in turn keeps their credit records in good standing,” Fourie added.
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