You may not have to pay off a loved one’s loan
A lot of South Africans use credit to manage the financial challenge.
Talking about money is a bit of a taboo in our society.
But talking about how much money people owe is even worse.
This is unfortunate because most of us are usually affected by the results of loans made by our loved ones.
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Understanding how many loans loved ones have, including the terms of each contract, is an excellent way to make sure the whole family is protected from the hidden risks of festive season borrowing.
A lot of South Africans use credit to manage the financial challenge.
“Many of us rely a lot on credit over the festive season to meet all the demands,” says Tlalane Ntuli, co-founder and chief operating officer at credit life insurance specialist Yalu.
“Regardless, it’s really important for everyone within the family to understand whether there are insurance policies in place for these loans, and how easy it will be to claim should the need ever arise.”
Credit life insurance is often said to be a requirement for personal loans, student loans, home loans in the affordable housing market and – for some banks – credit cards.
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“The level of public awareness when it comes to credit life insurance is very low,” explains Ntuli.
“Sometimes family members go through the agony of paying off a loved one’s debt, completely unaware that there is a policy in place for the loan that they can and should be claiming on.
“This is actually something I have first-hand experience of, and is part of the reason why we created Yalu.
“Getting caught in this situation is a cruel irony, made worse by the fact that establishing the facts is actually simple, once you know what to do.
“The trick is to keep it simple.
“Get together for 10 minutes, list the various credit lines everyone has and tick off which ones you are certain you have credit life insurance cover for.
“This exercise puts the family in a great position to take action and make sure the risk is minimised,” she explains.
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