With South Africa currently in lockdown, many of the major South African banks are offering payment holidays for their clients.
The financial implications that follow in COVID-19’s wake are unmatched by any other crisis faced by our country and financial institutions have geared up to do their bit to help consumers get through these difficult times.
A payment holiday is a feature offered by financial institutes that allows you to take a temporary grace period, especially during a global crisis such as the one caused by COVID-19, lessening the financial burden of loan and/or mortgage repayments.
Payment holidays are not mandatory, but rather an option for those who are in a desperate financial situation which impacts their ability to make ends meet.
It may still be advisable for those who are able to honour their repayments comfortably, to continue doing so, to avoid the need to play “catch-up” at a later stage.
Standard Bank is offering financial relief for small and medium-sized businesses in the form of loan instalment relief for a total of 90 days, beginning on the 1st of April.
This relief, which Standard Bank has classified as the Coronavirus Business Interruption Payment Scheme, applies to businesses that meet the following criteria:
For qualifying clients, instalment relief will defer payments on the following until the 30th of June 2020:
Normal fees and interest will continue to accrue over this time. Clients will be eligible for this relief if:
The following clients will be excluded from the installment relief:
You are eligible for this relief if:
The following clients will be excluded from the instalment relief:
The following are eligible for financial relief:
Standard Bank has decided to offer this relief automatically to all clients who meet the above criteria. However, they are offering the option to opt-out of the instalment relief to those who wish to do so.
Furthermore, Standard Insurance is implementing a 25% cashback relief on its car insurance premiums.
As of the 1st of April 2020, FNB implemented certain measures in order to provide some relief to their business and private clients whose financial stability has been negatively impacted by COVID-19.
This assistance will apply to clients who have demonstrated reliable and consistent banking behaviour prior to the Coronavirus outbreak.
FNB will be providing the following relief to qualifying clients for a period of three months until 30 June 2020:
It’s important to note that fees and interest will continue to accumulate as usual on all outstanding balances.
ABSA is providing relief measures that apply to their wealth, corporate, business bank, private bank and retail clients.
Their relief programme will not attract any additional administration fees and aims to provide support to corporate and business banking clients based on their unique requirements and operations.
ABSA’s programme includes a three-month payment relief and allows customers in need of short-term financial relief aimed at reducing their monthly instalments.
All clients with up-to-date accounts and who have been negatively impacted by the Coronavirus pandemic will be afforded the opportunity to opt-in for the payment relief provided by ABSA.
This relief programme allows ABSA clients the opportunity to either continue honouring their payments if they so choose, to defer payments for a period of three months or to pay reduced instalments as agreed upon by the bank.
The type of relief offered by Nedbank will depend on their assessment of your current loan repayment commitments.
After reviewing your loan profile, Nedbank will then consider and offer the most appropriate solution for you.
The following options may be available to those who qualify:
Payment holidays can provide consumers and small to medium business owners in South Africa much-needed financial support during these difficult times.
If you would like more information on how payment holidays work, or for legal assistance with deciphering the terms and conditions of your bank’s instalment relief programmes, please contact our attorneys today.
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