Capitec will refund interest if you repay your loans after Covid-19 relief break

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Capitec says it has already refunded more than R160 million to customers and will pay another R60 million this month.
Photo: Supplied by Capitec
Capitec says it has already refunded more than R160 million to customers and will pay another R60 million this month. Photo: Supplied by Capitec
  • Capitec says it will refund 100% of interest it charged customers during the first three months of payment relief period if they resume good payment behaviour for a year.
  • When banks offered payment holidays to customers at the beginning of the lockdown, they continued to charge interest on months that consumers were not paying, effectively increasing their outstanding debt and loan periods.
  • Capitec says it has already refunded more than R160 million to customers and will pay another R60 million this month.


As if it needs more reasons to create affinity with its customers who - together with third parties like Forbes, have voted it the best bank for several years - Capitec has decided to give some of its customers a breather this January by refunding them a portion of the interest charged when they requested payment holidays.

All banks in the country offered repayment holidays and other relief mechanism, like additional credit lines to businesses when South Africa began its lockdown in March 2020. But banks did not suspend interest payments on months that consumers were not paying their monthly instalment. This effectively increased those customers' outstanding debt and loan duration.

Now Capitec said it had decided to offer a 100% refund on interest that incurred during payment breaks to extend another "financial relief" to its clients. This will affect all clients who took up the bank's Covid-19 payment break or rescheduled their relief plan between 27 March and 19 July 2020. But only interest charged in the first three months of the relief period will be refunded.

However, to qualify for the interest rebate, clients have to get back into the habit of paying their loan instalments on time 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 refunded. After a year of good repayment history, the remaining 50% of the interest will be refunded.

"This month over R60 million is being refunded as 50% of the interest to nearly 40 000 clients who honoured six months of loan repayments," said Capitec in a statement.

It added that over 80 000 of its clients have already received more than R160 million in interest refunds in 2020.

Banks and insurers have had difficulties convincing some of their customers who took up the payment relief to get back into repaying their loans and premiums again as more people took salary cuts or lost their jobs completely in 2020.

This may explain why Capitec is incentivising people to honour their instalments.

"This is our way of rewarding our clients for meeting their loan repayments and showing good financial behaviour during a tough time," said Capitec CEO, Gerrie Fourie, adding that this will also help them maintain good credit records.

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