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R200,000 later, family still paying off loan

By Consumer Line, with Thuli Zungu | Oct 10, 2011 | COMMENTS [ 22 ]

IMAGINE paying more than R200,000 for a loan of R16,000 and being told you still owe money? It's crazy, but true.

A Soweto family regrets ever applying for a bond to build two rooms and a garage from the erstwhile People's Bank, now taken over by Nedbank.

Nompumelelo Mallie of Dube Village said her late mother, Nomvuso, took a loan from People's Bank in 1985 to build two rooms and a garage to accommodate a family of nine.

She said after building the rooms her mother received a "happy letter" from the bank to sign and soon thereafter commenced repaying the loan.

The installment was R200, which was payable over a period of 20 years, Mallie said.

Her mother repaid the loan until her death in 1991, she said. At the time of her death her mother had paid more than R14000, Mallie said.

As the eldest child in the family she continued with the repayments with the blessings of the bank, Mallie said.

Mallie claims she paid R700 a month until 2005, when the bank threatened to sell the house at auction because they had accumulated arrears on the account.

"We paid the R45000 the bank demanded to stop the auction and continued to pay our regular installment," Mallie said.

She said she continued paying though the bank had neglected to action the life insurance cover her mother had used as collateral.

"It was only in 2009 that Nedbank realised their error and paid R63000 into the bond account leaving a balance of R3000, (which) I agreed to pay," Mallie said.

Mallie said she was now battling to get the title deed from the bank attorneys, who were demanding more money from her.

"Now their attorneys are giving me hell! They say we won't get our title deed until we pay R1400, which they claim we owe the bank," she said, adding that the bank knew nothing about the shortfall the attorneys were demanding.

She said it was good of banks to help the destitute, but it was bad if they took advantage of the situation, even though they had been paid more than enough.

"It is only when you have been taken for a ride that you end up repaying more than R200000 for a loan of R16000," Mallie said.

She said if Nedbank were fair, it would refund a portion of the repayment it should not have received had they actioned her mothers life cover in 1991.

Mallie said she would be happy to get the title deed without paying any additional fee.

Nedbank is investigating the matter and has promised to comment after it have finalised the investigation.

COMMENTS [ 22 ]

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I really don't understand Nedbank and how they charge people. It is hillarius to even think of their interest charges on savings. For a month statement, they charge their client R10 per page. It is a robbery bank this one.

Oct 10, 2011 8:53 | 0 replies

This is not fair because this loan should have been cancel-led the day mother died,they need to be sued

Oct 10, 2011 11:45 | 0 replies

I hate greedy lawyers who always take advantage of the poor people...in all fairness nedbank must refund this woman...the interest of 16000 can't be 200 00...nedbank's reputation is at stake if they don't refund this women.@sowetan please make a follow up, we need to know nedbank's respond.....

Oct 10, 2011 12:14 | 0 replies

People's bank ke masepa, I hope Nedbank will be re-imbursing this family. Cash is king for real.

Oct 10, 2011 12:23 | 0 replies

That's banks and lawyers for you... boJudase! Be careful out there, the devil is masquerading as bankers and lawyers.

Oct 10, 2011 12:33 | 0 replies

Thats A Real Shark!

Oct 10, 2011 12:52 | 0 replies

@tholi i get your point but my question was referring to now, i just want to know whether is advisable to take a personal loan or home loan in terms of renovation or extending house because in terms of interest are not the same.

Oct 10, 2011 1:8 | 0 replies

Pabi

I hear you sisi, I would not know what will be the best option but I can only refer to my own experience. I took the loan as well at the time I was not earning nearly as what i needed the bank said i should take a home loan instead for a simple reason the repayment terms are longer and the personal loan the repayment are not as long and I only needed 40 000 to add the boys rooms. I didn't pay for it 20 years but 6 years because the repayment was really really small.

Oct 10, 2011 2:34 | 0 replies

@ Pabi. It is advisable to take a homeloan , interest rate is less than that of a personal loan. Eg if you are applying for a personal loan of R100 000 your instalment will be +- R 2 880 over 6 year and home loan will be R1 820 over 6 years.

Oct 10, 2011 3:3 | 0 replies

@Pabi
There are two types of loans, which are:
1. Secure loan e.g. Home loan/bond and
2. Insecure loan e.g personal loan, car finance, credit card etc.

Secure loan is the best option because lenders charge less interest as their money is secured with your life cover and other insurance covers which may be applicable and;
Therefore the insecured loan will be the opposite


Oct 10, 2011 4:2 | 0 replies

Thieving ba$tards. Legalised theft - that what it is. The same bank set aside hundreds of millions for its directors share incentive scheme years ago while this poor family was being r@ped.

Oct 10, 2011 11:32 | 0 replies