How To Reduce Your Loan Repayments Today
If you have ever bought anything on credit or taken a loan at some point in your life the chances are that you have paid or have been paying for something you don’t even know about, Credit Life Insurance. In South Africa, there has been widespread abuse of consumers who have such insurance.
Credit providers don’t explicitly tell you about the Credit Life premium included in your repayments, they simply slip it into your agreement. It’s compulsory for some loans, so you need to have it but do you need to be paying their excessive premium? Simply put, nope you don’t.
Quick Credit Life Insurance Explanation For The Average Joe
Insurance that pays your debt if you become disabled, get retrenched or pass away.
More specifically, your credit life insurance will pay off your debt in the form of a lump sum or installments to your credit provider if you:
- Become disabled (temporarily or permanently)
- Get retrenched from work (if you are permanently employed)
- Pass away
How Can I Reduce My Loan Repayments?
You probably don’t’ know that you have the option to choose your own credit life insurance provider. This can be difficult to understand, difficult to navigate and leave you feeling cheated.
Firstly, in South Arica, not many of us know that Credit Life Insurance is already a hidden cost built into say our Personal Loan so just knowing that it’s their gives us the power of information and knowledge is key right! Let’s use it wisely.
Many Credit Lenders/ providers prey on the fact that we don’t know that Credit Life Insurance is built into our agreement and they can charge their own fees for the cover. BUT just because they are offering it to you doesn’t mean you have to accept it. Even though credit life cover may be compulsory on most loans, you have the right to shop around and choose your own provider, that may very likely be cheaper than the policy that the lender is offering you. So why shop around? To save some of your hard earned money just like Tim did, get a free quote to save:
Is It Too Late?
The new Credit Life Insurance regulations came into effect in August 2017, which stated that the Credit Life insurance costs are capped at R4.50 for every R1,000 loaned and allows consumers to choose their preferred Credit Life provider, instead of just accepting the banks/ lender’s policy offer.
What is particularly important is that the capping of fees for credit life insurance premiums applies only to new loans, not retrospectively (loans before the August of 2017). This means that you could easily be paying more than double the new capped rate for your credit life insurance. Doesn’t seem fair?
It doesn’t matter if you have had the credit for a year or for a month, you are allowed to switch at any point in time as long as there is no break in policy cover which our partners at Yalu help with. Click the link and fill in the form and we will see how much we can save you: