Payment Holiday | Financial relief measures offered by banks

State Of Disaster / Trouble Servicing Debt Payments

​The reality of the 3 months state of disaster announced by the President on March 15, 2020 and the following 21 days lockdown period announced on March 26, 2020 is that many lenders may have trouble in servicing their debts.  
In a positive response, all banks are now offering conditional relief measures to their clients.
See Disclaimer in the end

We received the information below from Lucid 
(Please note:
This is mainly an extract from communication received from Lucid. via the desk of our preferred bond originators, ​Bond Excel.
Though this publication contains typical promotional content for Lucid, it still is very valuable information.)
​
1.  The bank’s offer and the effect thereof on your credit score.
2.  Possibility of a claim against your credit life policy
3.  Present service disruptions experienced by credit providers & banks
4. Home loan repayments or any other related debt relief contact details.

1.  The bank’s offer and the effect thereof on your credit score.

​All banks have responded to the COVID 19 lock-down, by offering clients a 3 month reprieve on their monthly repayments.

How this affects your credit profile and score?
Banks report repayment information to the credit bureaus monthly. This information reflects on your credit profile and directly impacts your credit score.

Over the next 3 months, banks should be reporting that your monthly repayments are up to date, notwithstanding you not making any repayments. This will then not negatively impact your credit profile and credit score.

Three months arrears will have a devastating impact on your credit profile and credit score. You could lose as much a 100-150 points on your credit score. While it only takes 3 months to ruin your credit score, it can take up to 12 months to fix/improve this.

It is therefore imperative for you to check your credit reports regularly over this period, to ensure that banks are not reporting that your accounts have fallen into arrears.
You can access a free copy of your credit report, monthly, from Lucid Clear Credit. https://www.lucidliving.co.za/register/

2.  Possibility of a claim against your credit life policy

​Almost every credit agreement includes credit life insurance as a mandatory requirement. The purpose of credit life, is to protect the creditor/lender in the event that you (the borrower) succumb to any of the following circumstances (i.e. risk events) viz. death, disability, dread disease, retrenchment etc. The risk events may differ depending on the particular insurance policy. If you experience any of the defined risk events, the policy has a benefit e.g. paying up the full outstanding balance that you owe on the credit agreement or part thereof.

The direct impact of the lock-down has resulted in businesses closing down for 21 days. The indirect consequence will see thousands of people lose their jobs. If you are retrenched, call your creditor/lender and ask for a copy of your credit life insurance. See if the policy covers retrenchment and what the benefit is. In most cases, the policy benefit should repay or cover your monthly instalment for anything from 3 to 12 months. This means that over the period, you are not liable for monthly repayments.

How this affects your credit profile and score?
In this instance, if you have claimed for the retrenchment benefit and your claim has been approved, the credit provider/lender should be reporting that your monthly repayments are up to date, notwithstanding you not making any repayments. This will then not negatively impact your credit profile and credit score.

It is therefore imperative for you to check your credit reports regularly over this period, to ensure that creditors/lenders are not reporting that your accounts have fallen into arrears.

You can access a free copy of your credit report, monthly, from Lucid Clear Credit. https://www.lucidliving.co.za/register/

3.  Present service disruptions experienced by credit providers & banks

​Most creditors are experiencing major disruptions to their businesses. If they are operational, its on skeleton staff and mostly staff working from home. There is a high probability that not all systems and processes are fully operational. This may have a direct impact on their monthly reporting to the credit bureaus.
 
How this affects your credit profile and score?
If you are honoring your monthly repayment obligations you want this correctly reflected on your credit profile. This will ensure you maintain a good credit rating and credit score.

4. Home loan repayments or any other related debt relief contact details.

Absa
• Absa will pre-screen customers and send an SMS offering this capability to their customers who will opt in or out.
• Customers can make contact with Absa using the following e-mail address: Bondrs@absa.co.za
• This is effective 1 April 2020.
 
Standard Bank
• All Standard Bank customers can send an e-mail to debtcarecentre@standardbank.co.za
Customers can expect a delayed response.
 
Nedbank 
• Nedbank Home Loans clients can make contact via 0860 553 573, however call volumes are high, so if they struggle to get through they can e-mail HLCollections@Nedbank.co.za for assistance.
• Should clients want to enquire about a Moratorium/Payment Holiday they can e-mail Nedbank at MoratoriumRequest@Nedbank.co.za for assistance.
 
FNB
• FNB has just released the following relief measures to the public, effective from 1 April to 30 June 2020, for those customers who’s financial stability has been impacted by the Covid-19 Lockdown:
• https://www.google.co.za/amp/s/businesstech.co.za/news/banking/385901/fnb-announces-coronavirus-relief-measures-for-customers/amp/ 
• Individuals and business customers can contact FNB via their usual digital and assisted banking channels to enquire about these services. During this week, customers will also be able to get more information on their current Covid-19 relief measures through a dedicated icon on the landing page of the FNB banking app.

​We trust that you found the information shared in this article about financial relief measures offered by banks as useful.  

Be safe.

Cobus van der Merwe
INCOMPROP

Disclaimer: This publication was compiled, with acknowledgement to sources mentioned, by Cobus van der Merwe / INCOMPROP who is a property practitioner. 
The content is not published as legal advice, nor is it meant to be financial advice.
Whilst effort has been made to ensure the accuracy of information shared, the author disclaims all liability in respect of the content of this information. The reader is thus required to satisfy himself / herself in all respects as to the accuracy thereof.