Bank says the interest refund will help clients in good standing to recover faster
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, Capitec said on Monday.
Capitec, along with other big 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.
SA’s big four banks — FNB, Standard Bank, Absa and Nedbank had announced payment relief for clients at the start of the lockdown, either suspending payments or reducing interest rates to ease the burden on consumers vehicle finance, credit cards, and home and personal loans.
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.
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.