Capitec gives clients R160m interest refund for payment holidays
Over 80 000 Capitec Bank clients have received more than R160 million from the bank in the form of interest refunds. As a financial relief measure the bank offered a three-month 100% refund on interest incurred during payment breaks to all clients taking up its Covid-19 payment break or rescheduling relief plan between 27 March and 19 July 2020.
The refunds are part of Capitec’s drive to help alleviate financial pressure on clients during the Covid-19 pandemic.
Gerrie Fourie, chief executive officer of Capitec, says, “While payment holidays offer temporary relief, loans still incur interest, which adds to the total cost of credit. We want to help our clients as much as possible during this time, which is why we waivered the interest for the relief period for clients who met the qualifying criteria.”
To qualify for the interest rebate, clients had to honour their loan instalments after the relief period. After six months of successful loan repayments, a refund equal to 50% of the interest charged on the loan during the three months is paid directly into the client’s loan account. After a further six months’ successful repayments, another 50% of the interest charged during the first three months will be refunded.
Over R60 million is being refunded this month as 50% of the interest to nearly 40 000 clients who honoured six months of loan repayments.
Take for instance a loan of R100 000 at an interest rate of 14%, which incurred additional interest of R3 541 over three months.
If a Capitec client made use of a relief plan and paid the instalments afterwards, R1 770.50 is refunded into the client’s loan account after six months and a further R1770.50 will be paid after another six months.
In effect, the client then paid zero interest for the three-month relief period.
Fourie concludes, “This is also our way of rewarding our clients for meeting their loan repayments and showing good financial behaviour during a tough time. By successfully completing their repayments, these clients are not only enjoying a 100% interest refund, but they have also kept their credit records in good standing.”