Many of us are uncertain about our next pay cheque, given that many businesses cannot operate while the country is in lockdown. What are your options if you can’t pay all your bills? Payment holidays and credit insurance are two lifelines worth investigating to protect your credit health. Let’s find out more.
There are a lot of financial tips and debt advice out there at the moment. Your job is to understand what the different options are, and to understand your own financial situation, before you make a decision and take action.
A payment holiday and claiming against your credit insurance are both options for people struggling to repay their loan instalments. Implement these tips to decide which way to go.
Credit insurance covers the outstanding debt on your accounts under specific circumstances. Most lenders insist that you have this insurance on your accounts.
Traditionally, credit life insurance sold with loans covered only retrenchment, disability and death. However, an amendment to the National Credit Act in August 2017, extended credit life cover to losing income while remaining employed, including being forced to take unpaid leave, which has happened to so many people as a result of Covid-19.
You should have a valid claim when:
You don’t have a claim when:
Take it when:
Don’t take it when:
Before you apply for a payment holiday, check the conditions of your credit insurance policy. If you are covered for loss of income, claim against the policy instead of taking a payment holiday. It is by far the best debt advice you can follow.
These are tricky times and we don’t know what to expect. But what you can and should do, is pay even closer attention to managing your money. Track all your expenses, save where you can and put money away for emergencies. This will keep you out of financial trouble and protect your credit health.
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