Given President Jacob Zuma’s age and income‚ it is difficult to make a case that he can afford the R7.8-million loan from VBS Mutual Bank‚ a financial advisor said.
Zuma announced on Monday that he has paid over the amount of R7 814 155 to the South African Reserve Bank as ordered by the Constitutional Court of South Africa in respect of non-security upgrades at his private Nkandla homestead.
These are the visitors’ centre‚ the amphitheatre‚ the cattle kraal‚ the chicken run and the swimming pool.
The Presidency said on Monday that Zuma had raised the amount through a home loan obtained from VBS Mutual Bank on its standard terms.
Theo Vorster‚ CEO of Galieo Capital‚ said that although the specifics of the deal would only be known by the client and the bank‚ there was enough information to make some deductions.
Zuma has repaid money for non-security upgrades to private residence
“That information will start with: if you need a loan of R7.8m‚ and you assume that loan would be linked to round about prime‚ and you assume that loan would be over a 20-year period‚ then your monthly repayments would be in the order of R78 000 per month.
“The president will have to fork out R78 000 every month for the next 20 years in order to service this loan of R7.8m‚” Vorster told 702’s The Money Show on Monday.
Vorster said the president’s salary was about R2.87-million per year — or R240 000 per month.
“Because of his age‚ he gets certain rebates. His after-tax income is somewhere around R140 000 per month. Of that R140 000 per month‚ he now has to fork out R78 000 to the bank. That makes the affordability quite difficult.”
He said that when the bank approves a loan‚ it considers what type of security a borrower could offer and whether the person was able to afford the repayments.
“I don’t know to what extent one can register a bond on Nkandla. Because of his age‚ how easy or difficult is it for him to service the bond for the next 20 years?”
He said Zuma’s after-tax income‚ by servicing this bond‚ would drop by about 60%.
“The question is how can he afford that‚ or is there perhaps some reckless lending involved? You cannot extend credit to somebody that cannot service it‚” Vorster said.
Vorster said banks required a person to provide it with income and expense information‚ and would consider whether the person can afford to service the loan and still have enough money left to live.
“My view is that given his age‚ given the structure of his income‚ it is going be difficult to make a case that he can afford this‚” Vorster said. – TMG Digital
Difficult to imagine how Zuma can afford R7.8m loan‚ says financial advisor
Given President Jacob Zuma’s age and income‚ it is difficult to make a case that he can afford the R7.8-million loan from VBS Mutual Bank‚ a financial advisor said.
Zuma announced on Monday that he has paid over the amount of R7 814 155 to the South African Reserve Bank as ordered by the Constitutional Court of South Africa in respect of non-security upgrades at his private Nkandla homestead.
These are the visitors’ centre‚ the amphitheatre‚ the cattle kraal‚ the chicken run and the swimming pool.
The Presidency said on Monday that Zuma had raised the amount through a home loan obtained from VBS Mutual Bank on its standard terms.
Theo Vorster‚ CEO of Galieo Capital‚ said that although the specifics of the deal would only be known by the client and the bank‚ there was enough information to make some deductions.
Zuma has repaid money for non-security upgrades to private residence
“That information will start with: if you need a loan of R7.8m‚ and you assume that loan would be linked to round about prime‚ and you assume that loan would be over a 20-year period‚ then your monthly repayments would be in the order of R78 000 per month.
“The president will have to fork out R78 000 every month for the next 20 years in order to service this loan of R7.8m‚” Vorster told 702’s The Money Show on Monday.
Vorster said the president’s salary was about R2.87-million per year — or R240 000 per month.
“Because of his age‚ he gets certain rebates. His after-tax income is somewhere around R140 000 per month. Of that R140 000 per month‚ he now has to fork out R78 000 to the bank. That makes the affordability quite difficult.”
He said that when the bank approves a loan‚ it considers what type of security a borrower could offer and whether the person was able to afford the repayments.
“I don’t know to what extent one can register a bond on Nkandla. Because of his age‚ how easy or difficult is it for him to service the bond for the next 20 years?”
He said Zuma’s after-tax income‚ by servicing this bond‚ would drop by about 60%.
“The question is how can he afford that‚ or is there perhaps some reckless lending involved? You cannot extend credit to somebody that cannot service it‚” Vorster said.
Vorster said banks required a person to provide it with income and expense information‚ and would consider whether the person can afford to service the loan and still have enough money left to live.
“My view is that given his age‚ given the structure of his income‚ it is going be difficult to make a case that he can afford this‚” Vorster said. – TMG Digital
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