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Cape Town - A number of Fin24 users wrote to say they feel the interest rates charged by African Bank are too high and their outstanding loan amounts keep on increasing steeply.
Some are even so desperate they feel as if they would have to pay off the loans until they die.
Some users are concerned that, since African Bank has been placed under curatorship by the SA Reserbe Bank, they will now be charged even higher interest rates to recover money even faster.
READ: African Bank: Curator answers questions.
Fin24 asked the curator, Tom Winterboer of PwC to explain.
Fin24 user Intlhakgosi writes: I just want to know what will the SA Reserve Bank do about the abnormal interest African Bank is charging their clients. You borrow R20 000 and you pay back R75 000. Is this fair? I just want to know.
Fin24 user Ingrid writes: My concern is more about the reckless lending that African Bank imposed on the poor and desperate people.
I have four loans with African Bank. I lost my job because of retrenchment in November 2013 and just recently found another job. I was earning R17 000 net per month when all these loans were granted.
The first loan was for R89 000, the second for R27 000, the third for R40 000 and the fourth for R12 000 (on a credit card).
I am trying to pay off the loans, but they are just too high. Can I take this for review and request reduction on interest?
Is the curator also going to look at what led to this disaster, the reckless lending and try to help the over-indebted clients of African Bank?
Fin24 user Deon writes: I currently have four loans with African Bank, as well as a credit card.
My loan repayments are more than R6 500 a month and have placed me under tremendous financial strain.
Is there any relief for people in my circumstances, since I feel the consultants I spoke to before taking out so many loans and placing myself in such a predicament should have advised me against over-indebting myself.
Surely African Bank should take some of the blame and as a result there should be some sort of relief for people in my situation?
They gave out loans without ensuring people were aware of the dangers of having so many loans.
Now they seem to be without blame since we, the clients of the bank, continue to pay back to the bank that cared nothing for us.
READ: African Bank 'kept lending to indebted customers'
Fin24 user Busi writes: I am concerned about the interest charged by African Bank on my loan. It is very high.
Fin24 user Marlon writes: Will the curator review loan agreements? African Bank's interest rates and repayments are very high. Would they look at this and make repayments lower and more affordable?
Fin24 user Mkhuseli writes: My concern is to be charged more interest by African Bank trying to recover from the situation.
Fin24 user Jomo writes: Does it mean the huge interest that we were paying on our loans with African Bank will not be added any longer?
Fin24 user Selby writes: I was given three loans while I was earning little and I struggled to pay. I simply don't have money to afford the instalments. When are they going to scrap the interest on those loans?
Fin24 user Phumzile writes: I feel the bank is charging too much interest and is not helping us black people.
Fin24 user Solomon writes: My loan skyrocketed from R54 000 to R56 561.15. I do not understand that. I need to verify why and if this is true, I will never borrow money from this bank ever again.
Fin24 user Jonathan writes: African Bank must stop its higher interest to customers, because in the end customers failed to pay because of it.
Fin24 user Caroline writes: This is scary, because I’m paying my loan, but it stands still. There is no change. It is always high, but they are deducting payment every month.
Fin24 user Rendani writes: I once went to this bank for a loan. One will pay this loan off until you die, because the interest is abnormal and they give people a long term of repayment. I suggest the bank is stopped from easily approving loans, because they make the poor become even poorer than ever.
Fin24 user Hoosain writes: Does this situation mean that interest on my loan is suspended until further notice? If yes, is this so that African Bank's debt owed by its consumers doesn't continue to grow as time ticks on?
Fin24 user Londy writes: My problem is the interest. The bank's interest is so very high that you pay them until you die.
Fin24 user Sibongile writes: I just want to know that this won't affect the initial interest rates on us who owe money to African Bank.
Fin24 user Cecilia writes: I have a loan with African Bank. What happens now? Will I pay more money or will the bank stick to the arrangements we made with them? And if I'm a bit behind, what will happen to me?
Fin24 user Nqobile writes: The interest on African Bank loans is very high and not fair.
Fin24 user Dorcas writes: I have two loans with African Bank of R5 000 each. I wrote a letter to them before all this drama happened, telling them that they were charging me more.
I have already paid R17 000 on the one and R8 000 on the other, but I am still owing more than R5 000 and I am not prepared to pay more than that.
The curator responds:
All payment plans, including interest rates, have been discussed, explained and agreed to by the customer.
It is the nature of an unsecured lender to charge more interest than traditional banks, because the client provides the unsecured lender with no security for the money they are borrowing.
Interest rates have not changed. The curator will make a decision in this regard in the future with due consideration to the interest rate caps enforced by the National Credit Act.
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- Fin24
Disclaimer: All articles and letters published on MyFin24 have been independently written by members of the Fin24 community. The views of users published on Fin24 are therefore their own and do not necessarily represent those of Fin24.
