Old Mutual offers a range of personal loans that can help South Africans cover unexpected expenses, make significant purchases, or even consolidate debt. Whether you’re looking to finance a home renovation, manage an emergency, or take advantage of an opportunity, Old Mutual provides solutions tailored to your needs.
Understanding the Cost of Old Mutual Loans
One of the key factors to consider when applying for a loan is the cost. Old Mutual offers competitive interest rates, but it’s essential to understand the fees involved. Here’s a representative example of the cost of a personal loan:
- Loan Amount: R5,000
- Loan Term: 3 months
- Total Interest Payable: R348.16
- Once-Off Initiation Fee: R649.75
- Monthly Admin Fee: R69
- Total Amount Payable: R6,204.91
The interest rate is calculated monthly, and there is a maximum interest rate of 29.25% annually. Additional fees such as initiation and monthly admin fees also apply.
How to Apply for an Old Mutual Personal Loan
Applying for a loan with Old Mutual is straightforward. Here’s what you’ll need:
- South African ID: You must be at least 18 years old and have a valid South African ID to apply.
- Proof of Income: This includes your latest payslip and three months’ bank statements that are no older than seven days.
You can apply in three ways:
- Online: Visit Old Mutual’s official website.
- Phone: Call 0860 000 866.
- In-Branch: Visit your nearest Old Mutual branch for personal assistance.
How to Improve Your Chances of Loan Approval
Not everyone qualifies for a loan automatically, and Old Mutual, like other lenders, assesses several factors before approving a loan application. To improve your chances of securing a loan:
- Ensure Steady Income: Lenders prefer applicants with a stable income, as it indicates a reliable ability to repay the loan.
- Check Your Credit Score: A strong credit score is crucial. Old Mutual will review your credit history, which reflects your financial habits. Paying off debts on time and avoiding excessive borrowing will improve your credit score and increase your chances of approval.
- Debt-to-Income Ratio: Lenders also evaluate your debt-to-income ratio (DTI). Aim to keep your DTI low by managing your current debts effectively.
The Impact of a Good Credit Score
Having a good credit score can significantly affect your loan approval and the interest rates you’re offered. The better your score, the more likely you are to qualify for lower interest rates and higher loan amounts. To maintain or improve your credit score:
- Make timely payments on all debts and bills.
- Avoid taking on additional debt while trying to improve your score.
- Regularly check your credit report for any discrepancies.
How do I apply for a personal loan?
You can apply online, over the phone or at your closest branch.
What documents do I need to apply for a personal loan?
- A valid South African identity document (ID).
- A current payslip not older than one month.
- Your bank statements for the last three months indicating three consecutive monthly salary deposits (the statements must not be older than 7 days).
How does a personal loan work?
Our personal loans works as follows:
- A minimum loan term of 3 months.
- A maximum loan term of 72 months.
- You could qualify for a personal loan of up to R250 000.
- Your interest rate is fixed. The fixed rate gives you the benefit of knowing what your instalment will be for the duration of the term of your personal loan, irrespective of any changes in the repurchase rate by the Reserve Bank.
- To apply for a loan over a period of 1 – 12 months, you need to be permanently employed at the same employer for at least 3 months.
- To apply for a loan over a period of 13 – 72 months, you need to be permanently employed at the same employer for at least 12 months.
- The interest rate applied is based on your affordability and personal credit profile.
- Businesses do not qualify for a personal loan.
- Your personal loan can be insured against death disability or retrenchment by taking out Credit Life Insurance. Credit Life Insurance is compulsory for loans with a term of 12 months and more.
What other requirements are there to apply for a personal loan?
- You need to be at least 18 years old.
- You need to earn at least R2 500 per month.
- The term of your loan must end before you turn 60 years of age.
How much does a personal loan cost?
Your loan installment consists of the following costs:
- Interest Rate – Each customer’s situation is unique. The interest charged on your loan will be calculated based on your affordability and personal credit profile
- Monthly Service Fee – A standard monthly service fee is applied to all loan accounts and is charged on a monthly basis
- Credit Life Premium – A credit life premium is charged monthly (for loan terms 12 months and above) and the premium is based on the rand value of your loan at the time of application
How do I make a loan repayment in a branch?
If you are in arrears, you can make a loan repayment in a branch using a debit card. Simply go into your nearest Old Mutual branch and tell a consultant that you want to make a loan repayment with a bank card. The consultant will help you make the payment with a point of sale machine.
- Credit cards cannot be used to make loan repayments
- The minimum repayment amount is R50
- A maximum of two instalments can be made in branch
When do I get my money?
If your loan application is successful, we will pay out the loan within 24 hours*, once approved and will notify you via SMS.
*Payout times may vary
When will my debit order be processed if I take a loan?
If you take a loan, your debit order will go off every month on your pay date or on the date when your salary is paid into your account.
If a loan is paid out within 14 days of your next salary date, your first debit order will only be processed the following month.
If a loan is paid out more than 14 days before your next salary date, your first debit order will be processed in the same month.
How will I be able to access my loan statement?
You will be able to access your loan statement by visiting your nearest branch or calling the call centre on 0860 445 445.
Can I apply if I have never had debt?
We look at your affordability and previous credit record when assessing your loan application, if you do not have previous debt we may not be able to proceed, but we will consider your personal circumstances and let you know what the outcome of your application is. You may only qualify for a small loan until you have built up a good track record.
What kind of loans does Old Mutual offer?
- Short-term loans, with a repayment period ranging from a one month term to 12 months.
- Long term loans with a repayment period that ranges from 13 to 72 months. The long-term loans also offer a consolidation element that allows you to settle and combine your other existing debt into one loan.
What are the benefits of taking up a consolidation loan?
- With only one repayment every month, it’s easier to manage your debt
- Having only one loan means you avoid multiple fee charges on multiple loans
- Consolidation helps you to get rid of revolving credit that has stuck with you for years
Will I be able to settle my loan earlier than the agreed term?
You will definitely be able to pay your loan off earlier than the agreed term. Settling your loan sooner means that you will be saving money on interest and fees.
Can applying for a loan have a negative impact on your credit score?
Shopping around for credit could potentially have a negative impact on your credit score if you apply for credit at multiple places at the same time. That is why you should carefully consider if you are really interested in taking up credit and where you would like to apply, before you start the process.
Why would I take up a loan with Old Mutual instead of another credit provider?
At Old Mutual, we care about our customers and we are responsible in terms of how we grant credit to our customers. This means that we take extra care during the loan application process to ensure that our customers can afford the loan that they are applying for. We also care about granting a loan to a customer that meets their needs while not impacting their ability to meet their other obligations. At Old Mutual we don’t want to keep you in debt indefinitely, we would like to support your financial needs with the end goal being financial freedom.
Why did Old Mutual venture into credit market?
At Old Mutual, we really strive to meet the needs of our customers. Expanding on the financial services that we offer, allows us to do that.
What is credit life?
Credit life is an insurance policy that provides cover in respect of your loan in events such as death, disability or retrenchment. Credit Life Insurance is compulsory for loans with a term of 12 months and more.
Does Old Mutual require credit life cover?
Old Mutual Finance is entitled to require you to take out credit life insurance for loans with a term of 12 months and more to ensure the loan is repaid if you die, become disabled or are retrenched. Old Mutual has arranged a policy through OMART, which is an Old Mutual insurance company.
You can either take this policy or provide your own policy when you apply. Not any policy will be accepted by Old Mutual Finance. It must be a policy that provides at least the same protection to you and Old Mutual Finance. Therefore, it must cover at least the outstanding balance in the case of death, or permanent disability. If you are temporarily disabled, it must cover the instalments for 12 months and if you are retrenched, it must cover the instalments for at least 12 months. It must also not have unreasonable exclusions or waiting periods.
Exclusion and limitation in relation to the different covered events apply. For example, the policy will not pay out if:
- you know that you will be retrenched when you take out the loan
- you injure yourself on purpose or commit suicide; and
- Your disability or death is as a result of existing medical conditions not disclosed that affected you 12 months before the commencement of cover under the policy.
Credit Life exclusions and limitations will be explained in detail during the loan applications process.
The credit life policy summary is available for you to read and you will get a copy when you loan agreement is concluded. The cost of the credit life cover will be shown to you when we provide you with the loan offer.
If you have any further questions regarding the credit life policy or you would like to use your own policy, we will refer you to a specialist to assist you, before we can finalise the loan. Please call them directly on 0860 000 886.