Bridging loans for pension payout

Get an affordable pension bridging loan in South Africa 

Though there is a multitude of reasons behind every financial emergency, there are specific reasons for certain types such as bridging loans.

When is it the right time to apply for pension bridging finance?

Most of the common reasons behind this type of finance are for accessing funds that you do not have now, however, that you are able to repay once your lump sum payout is made.

If you’ve recently been let go at work or resigned from your job, then you’ll have a period where you might not have access to a stable income. It goes without saying that this can become a problem in any household if you have bills and costs to pay each month. A pension bridging finance loan is a short-term loan secured against your pension or provident fund.

The best time to apply for it then is when you’re awaiting the pension payout. There is a bit of paperwork that needs to be done before these lump sums are paid to their beneficiaries and during that period, you’ll still have to make ends meet and without the money to do so, you could land yourself in deep water. Do yourself a favour and get your cash flow on track before it costs you!

How much is it going to cost me?

That all depends on the amount you need and the period you need it over. It also depends on who’s processing the loan for you. Each lender has their own terms and conditions, as well as their own costing structures. Regardless of who you apply through, you should be guaranteed that all rates are strictly in line with the National Credit Act. Rates are calculated either daily or monthly and it’s up to you to establish which will suit you best in the long run.

What does your risk profile look like? If for any reason you are deemed a risk, the credit provider will exercise your application with caution. There are a number of factors that impact the decision to lend you money while you anxiously await your provident fund, and they are to be kept in mind when applying. Responsible lending is, of course, non-negotiable, and for that reason, you are safe in terms of affordability being determined by the credit provider.

Before you apply for a bridging loan, find out what the admin fee is, as well as their monthly interest. These two costs could make all the difference for the duration of the loan.

How do I apply?

Simply log on to the online website of the lender you’ve decided to apply with. All the necessary requirements will be loaded on the site in the application section for your convenience. It’s a matter of putting forward an inquiry for a consultant to contact you back or completing and uploading all of your paperwork there and then!

Speaking of paperwork, there are a few documents you have to have in place before you go any further. The first is a copy of your pension or provident fund statement. Most schemes are quite good at providing this statement to you as you need it. That, along with proof of employment at your current employer is the specific documentation you need for pension bridging finance.

The remaining required documentation includes bank statements for three months, your last company stamped payslip and proof of South African ID.

Your finance is on its way!

As soon as you have completed an application you can expect a thorough check on all credentials. This should go fairly quickly if you haven’t missed anything or given false information. A credit check is conducted to deem your credit score is healthy and your employment status as well. If any further information is needed from the provider to assist in the decision-making, they will contact you for this.

Being approved means the rest is quick and fuss-free! You’ll be emailed a contract that requires your signature and approval of all terms and conditions. As soon as you’re done, simply send it back and wait for the funds to reflect in your account. Now you can comfortably carry on with your month as though there was no break in your finances and very little is affected.

The shortest turnaround time for this loan payout is 24 hours. Some lenders might take a little longer, make sure you budget for that.

Am I guaranteed approval?

Nothing in life is a guarantee and this shouldn’t be seen any differently. However, with that said, you can certainly increase your chances of being approved, or rather, avoid being declined. Make sure that your risk profile is in check, that your credit profile is looking good, and lastly, make sure that you can actually afford to repay the loan in full.

An application will only be declined to safeguard you and your finances and the risk of the lender. If you are comfortable with your financial status, you probably don’t need to worry. Being blacklisted adds minor shadows on the application, but it doesn’t exclude you from the list of clients who can apply. Anyone awaiting a pension fund payout that has all their paperwork in order can apply if they meet the necessary criteria.

It’s not easy when you’ve just lost your job or go through a situation where you had to resign, but still, require the finance before you see a penny from your pension. It’s for this very reason that bridging finance is available at all. The pension product is thus ideal for those that are between employers and awaiting that large lump sum. When the time comes to apply, make sure that you have shopped around and found the loan provider that will look after your needs as well as your wallet!