Introducing the Old Mutual Zero Interest Loan

The Old Mutual Zero Interest Loan is designed for South Africans who want to leverage their existing plan or savings benefit without accruing interest charges. Eligible clients can access a loan linked to their existing Old Mutual plans, provided certain conditions are met, such as no cession or pledge on the plan and a non-liquidated estate.

This loan stands out by charging zero interest and offering flexibility in repayment. Clients simply continue with their established premium schedules or make ad hoc payments into their plans while repaying the loan.

Importantly, loan amounts may be limited by South African regulations, with the final amount being the lesser of what you request or what is available by law. All repayments must be made in rand at Old Mutual’s main office, and the full amount is due should your plan mature, your estate be liquidated, or the investment fund drops below a required limit.

How to Apply: Step-by-Step

1. Confirm eligibility: Ensure your plan is active, not ceded or pledged, and your estate is not under liquidation.
2. Request the loan: Complete and sign the necessary application forms, double-checking all details for accuracy.
3. Submit documents: Provide physical address, proof of identification, and related paperwork as required.
4. Await approval: Old Mutual will assess your application according to regulations and internal limits.
5. Receive funds: If approved, funds may be paid in instalments at the company’s discretion.

Two Key Benefits

First, the most compelling advantage is zero interest on your loan. This can save a significant amount over time, compared to traditional loans.

Second, you’re not forced to change your premium schedule. Flexible repayment arrangements mean you can manage your finances without unexpected pressure.

Consider the Potential Disadvantages

Regulatory restrictions apply, meaning only one loan and one disinvestment are allowed in the first five years of the plan. Additionally, the loan limit is capped by law and plan value.

Repayment is mandatory in case of certain events. Early plan closure or insufficient fund values could trigger immediate repayment, which may cause financial inconvenience.

Our Verdict

For those with an Old Mutual savings plan, the zero interest loan offers an elegant solution for short-term funding requirements. Its user-friendly, interest-free nature stands out among competitors, although clients should read the terms carefully to understand all limitations and triggers for repayment.