Old Mutual’s Zero Interest Loan offers customers a unique opportunity to access funds without bearing any interest charges. The zero interest feature sets it apart, ensuring that you only repay the principal borrowed. Importantly, existing premium schedules or ad hoc investments on your plan remain uninterrupted when you choose this loan option.

Loan amounts are subject to limitations under current South African insurance regulations. The requested sum must not exceed the permissible maximum according to policy terms and the Long-term Insurance Act.

Repayment terms are flexible, and you can repay the loan at your convenience as long as you meet Old Mutual’s minimum repayment thresholds. Settlement of the loan is required under certain triggers, such as payout of benefits, insolvency, or when your investment value dips below company-defined limits.

How to Apply for the Zero Interest Loan

1. Review your current Old Mutual plan to confirm eligibility and available loan amount.
2. Complete the official loan application form, ensuring all information is accurate and up-to-date.
3. Submit any required supporting documents as outlined by Old Mutual.
4. Wait for Old Mutual to process your request and provide approval based on regulations and your policy’s status.
5. Upon approval, receive the loan funds according to the stipulated terms, possibly in multiple instalments if further payment clearance is needed.

Pros: Main Benefits of the Offer

The standout advantage of Old Mutual’s Zero Interest Loan is absence of interest, reducing the overall cost of borrowing. Flexible repayment options mean there’s no penalty for early or partial repayments, which can improve budgeting for many clients.

Additionally, the process is embedded within your existing Old Mutual plan, maintaining policy continuity and simplifying the lending journey for policyholders. The absence of a requirement to restructure your investment makes this an accessible choice.

Cons: Possible Limitations to Consider

Loan limits are regulated, potentially restricting the amount you can borrow. This could be less suitable for those needing higher amounts immediately. Another drawback is the requirement that your plan is not ceded or pledged elsewhere, limiting availability for some users.

Policy fees, such as a Reduction Fee or a Transaction Admin Fee, may apply, slightly increasing the true cost despite the zero interest. Conditions tied to the value of your investment fund may also trigger early repayment requests.

Verdict

Old Mutual’s Zero Interest Loan provides a unique, cost-effective way to access funds while keeping your current investment intact. Despite some regulatory and procedural constraints, the zero interest feature and flexible repayments offer clear advantages for policyholders needing fast, affordable access to cash.