Struggling to pay a debt? Your options: credit insurance vs debt relief holiday
Also, read:
Covid-19 and the nationwide lockdown to slow down its spread is obliterating the economy.
South African consumers – already highly indebted before the outbreak – will face severe hardships in the months and years to come.
Many will lose their jobs and their ability to service their loans.
There are two options you may want to consider at this time:
-
Access credit insurance
-
Debt relief holiday

You may not realise it but – if you took out credit - it’s likely that you have credit insurance linked to the loan.
Credit insurance (aka a “credit life policy”) is a policy that pays your debt if you die or become disabled or, sometimes, if you get retrenched.
Every credit insurance policy is different; check your terms and conditions.
Most credit providers in South Africa has by now launched various Covid-19 “debt relief holidays” whereby repayment terms are extended and/or repayments are halted for a period.
The Money Show’s Bruce Whitfield asked personal finance journalist Maya Fischer-French about the pros and cons of dipping into credit insurance versus opting for a debt relief holiday.
Whitfield also spoke to FNB Life CEO Lee Bromfield.
If you take the payment holiday… it adds the capital amount you must pay off. It’s not a freebie… Credit life insurance… it’s been abused previously… people don’t even know they have it… Check if you have credit insurance… you most likely have it!
Maya Fischer-French, personal finance journalist
Only African Bank sent out a press release saying credit life insurance is available…
Maya Fischer-French, personal finance journalist
Credit life has been around for a bit. It’s embedded in our processes… we’re looking at contacting all our customers… how they can claim… We prefer our customers not to go into further debt…
Lee Bromfield, CEO - FNB Life
For more detail, listen to the interviews in the audio below.
This article first appeared on CapeTalk : Struggling to pay a debt? Your options: credit insurance vs debt relief holiday

Source : https://www.123rf.com/photo_33804715_worried-young-african-american-couple-looking-through-bills-online.html?term=debt%2Bblack&vti=lj51dwle6urrcs53ho-1-14
More from MyMoney Online

Economy in 2021: 'Expect a better year for South African assets'
An economist expects China growth at 9.5%, US money-printing, rising metal prices and trade- and current-account surpluses in SA.
Read More
Retirement funds in SA are changing – new laws come into effect on 1 March 2021
Bruce Whitfield asks personal finance advisor Warren Ingram to explain in detail the new laws affecting provident funds.
Read More
How to buy your very first share – even if you have mere cents to invest
You can buy R1 (or even one cent) worth of shares. "The key to getting started is to get started," says Charles Savage.
Read More
Buying a new car may be possible – even if you can’t afford the monthly payments
Need new wheels? WesBank’s Lebogang Goaaketse discusses a popular method for making repayments more affordable.
Read More
Buy hugely discounted properties (up to 70% off) on auction right now
Distressed properties on auction are going for a song. Bruce Whitfield interviews property economist Francois Viruly.
Read More
Free Covid-19 vaccine for all medical aid members – Discovery CEO
"It’s mandatory for medical schemes to pay for for the Covid-19 vaccine," says Dr Ryan Noach, CEO at Discovery Health.
Read More
Vaccine optimism is priced in – asset manager
Investors are getting ahead of themselves, warns Pieter Hundersmarck, a fund manager at Flagship Asset Management.
Read More
Need new wheels? Car subscriptions at a monthly fee have arrived in South Africa
Bruce Whitfield interviews Tinashe Ruzane of FlexClub, where you can choose from a variety of car subscriptions for a monthly fee.
Read More
Naspers-owned Prosus (owner of Tencent) starts JSE's largest share buyback ever
The Money Show’s Bruce Whitfield interviews Basil Sgourdos, CFO at Naspers.
Read More
Pepkor Holdings profits fall 34% but gains 'significant' market share
The Money Show’s Bruce Whitfield interviews Leon Lourens, CEO at Pepkor Holdings.
Read MoreMore from Personal Finance with Warren Ingram

Economy in 2021: 'Expect a better year for South African assets'
An economist expects China growth at 9.5%, US money-printing, rising metal prices and trade- and current-account surpluses in SA.
Read More
Retirement funds in SA are changing – new laws come into effect on 1 March 2021
Bruce Whitfield asks personal finance advisor Warren Ingram to explain in detail the new laws affecting provident funds.
Read More
How to buy your very first share – even if you have mere cents to invest
You can buy R1 (or even one cent) worth of shares. "The key to getting started is to get started," says Charles Savage.
Read More
Buying a new car may be possible – even if you can’t afford the monthly payments
Need new wheels? WesBank’s Lebogang Goaaketse discusses a popular method for making repayments more affordable.
Read More
Make your retirement savings last longer
Personal finance advisor Warren Ingram on ensuring you don’t run out of money before you run out of life.
Read More
Yes, money can 'buy' you happiness! But invest in experiences, not things
There's also a magic number beyond which more money doesn't equate to more happiness, says personal finance guru Warren Ingram.
Read More
'Don't overspend on a car purchase - smaller and cheaper equals better value!'
Low interest rates and plenty of deals on offer - personal finance guru Warren Ingram points out the pitfalls on The Money Show.
Read More
Stressed out? Playing for time when you have a home loan but no income
Warren Ingram explores the options, focusing on case study of guest house owner whose investments equal outstanding bond amount.
Read More
Feel you've missed the money boat? Don't fall into the FOMO investment trap!
Bruce Whitfield and personal finance expert Warren Ingram get to grips with why perhaps you shouldn't, if you didn't...
Read More
What does the contentious Regulation 28 mean for your retirement funds?
On The Money Show, finance expert Warren Ingram explains why he believes the pros of the regulation outweigh the cons.
Read More