Pension Bridging Loans South Africa
Cash advance of up to 75% of your pension payout
Waiting for a lump sum payout from your pension or provident fund? We can arrange a bridging loan for cash NOW.
New Heights Finance is a finance broker that doesn’t directly provide loans. We partner with various financial institutions to offer you a variety of loan options and help you compare different products. New Heights Finance may earn a commission, which is usually a fixed percentage of the loan amount and can vary depending on the lender.
Bridging loans for pension payouts
A pension bridging loan, also known as a retirement bridging loan, is a financial product offered in South Africa that allows retirees to access a portion of their pension lump sum as a cash advance before the full amount is paid out. This can be particularly useful for retirees who need immediate cash for expenses like home renovations, medical bills, or debt consolidation.
Key features of a pension bridging loan:
- Cash advance: You can receive up to 75% of your pension lump sum as a cash advance.
- Repayment: The loan is typically repaid from the remaining portion of your pension lump sum when it’s paid out.
- Interest: You’ll generally pay interest on the loan, which can be fixed or variable.
- Eligibility: To be eligible for a pension bridging loan, you’ll need to meet certain criteria, such as being a retiree with a pension fund.
Benefits of a pension bridging loan:
- Access to funds immediately: You can get the money you need right away, without having to wait for your entire pension lump sum to be paid out.
- Flexibility: You can use the funds for whatever you need, as long as it’s within the terms of the loan.
- Potential for interest savings: Depending on your financial situation, you might be able to save money on interest by taking out a pension bridging loan instead of other types of loans.
Loan Conditions
Loan Term: 65 to 90 days
Minimum Amount: R2000
Maximum Amount: R50 000
Interest: 28%
Candidates: Must be retired, retrenched, dismissed, divorced or have a death claim to qualify
Subject to lenders Terms and Conditions at time of quote
Cost Schedule
- Minimum Term – 65 days
- Maximum Term – 90 days
- Minimum APR – 28 %
- Maximum APR – 28 %
Example:
- Loan advance R10,000
- APR 28%
- Initiation fee R1197
- 90 day service fee R205.20
- 90 day interest R783.79
- Total repayment at 90 days R12,185.99
You may qualify for funding if…
You recently resigned
Have you recently resigned from your position? Perhaps you are relying on using the money from your severence package to cover your expenses while you either wait to start a new job or wait to find a new job. A delay in receiving your payout can affect your ability to cover your expenses, which in return can affect your credit. In fact processing your pension or provident payout can take months! Take control of your finances by applying for a pension bridging loan, giving you access to up to 75% of the total amount while you wait to be paid out.
You're retiring
You have worked hard your whole life and should be looking forward to your retirement. Your pension fund or provident fund taking months to pay your lump sum can throw a massive spanner in the works. Don’t wait for the bills to pile up while you sit high and dry waiting for your payout. Apply for a bridging loan for pension payout and enjoy your hard-earned retirement.
You've been retrenched
We are in some of the toughest economic times we have ever been in and as a result many South Africans face the reality of retrenchment. Retrenchment is often very sudden and difficult to prepare for, dealing a huge financial blow to those affected. When you have been retrenched, it can take months to receive your pension payout, while you struggle without an income. A pension bridging loan can ease the financial strain by advancing you up to 75% of your pension fund while you wait.
You're getting divorced
Getting divorce can not only take a toll on you emotionally, but it can also be a huge financial blow. Often unforseen expenses such a legal fees or maintainence pop up that need to be paid urgently. In this case, you need cash fast. Often people would use the divorce settlement to cover expenses but this takes months and expenses need to be paid now. A pension bridging loan is the answer to getting cash in hand fast.
You've been dismissed
If you have been unexpectedly dismissed, it can have extremely serious financial implications. Considering the tough economic environment, it is almost impossible to accumulate savings for a rainy day. It can take up to 6 months and sometimes longer to receive a payout from your pension fund, and in the meantime the bills pile up. Alleviate the pressure by getting 75% of what is due to you right now.
Annuities
Do you reveive an annual payment from your annuity? It is highly unlikely the timing of this payment will coincide with unexpected expenses cropping up. Applying for an advance on your annuity payout can help alleviate the financial burden.
FAQs
What is a pension bridging loan?
A pension bridging loan is a type of loan that allows you to access a portion of your upcoming pension payout in advance. This can be helpful if you need funds to cover unexpected expenses or take advantage of time-sensitive opportunities.
How much can I borrow?
The amount you can borrow will depend on the value of your pending pension payout. Generally, you can access up to 75% of your lump sum payment or a maximum of R50 000.
How long does it take to get my cash advance?
The approval and disbursement process for a pension bridging loan can be relatively quick, often taking a few days. However, the exact timeframe may vary depending on the lender and the specific circumstances of your application.
How is a pension loan repaid?
The loan will typically be repaid from your pension payout once it becomes available. If you have any remaining balance after the loan is repaid, the excess funds will be returned to you.
What can a pension bridging loan be used for?
- Home improvements: This could include renovations, repairs, or extensions.
- Medical expenses: This could include doctor’s bills, hospital stays, or medications.
- Debt consolidation: This could involve combining multiple debts into a single loan with a lower interest rate.
- Vehicle purchase: This could be for a new or used car.
- Emergency expenses: This could include unexpected costs like funeral expenses or legal fees.
- Investment opportunities: In some cases, pension bridging loans can be used to invest in stocks, bonds, or other financial instruments.
What supporting documents do I need?
For Pension/Provident
- Completed application forms (the documents will be sent to you on receipt of your enquiry)
- Your ID
- 2 month current bank statement
- Last pay-slip
- Pension / Provident Fund benefit statement
- Letter from employer confirming and accepting severance package / medical disability (where applicable)
- Letter of appointment with new company (where applicable)
- Divorce settlement (where applicable – i.e. if you are wanting to bridge a pension payout which is part of a divorce settlement)
For Invesments/Annuities
- Completed application forms (the documents will be sent to you on receipt of your enquiry)
- Your ID
- 2 month current bank statement
- Proof of policy/investment from the Insurance company
- Proof of maturity date of policy/investment
For Death Claims
- Completed application forms (the documents will be sent to you on receipt of your enquiry)
- Your ID
- 2 month current bank statement
- Beneficiary statement stating amount and distribution of monies
- Death certificate
- Divorce settlement where applicable
- Benefit statement from the fund of the deceased
- Latest pay slip of deceased if possible
NOTE: Please ensure that all documents are legible. If they are unclear or too faint, this causes delays in processing. In many instances bridging can be arranged in 5 working days but if the fund administrators do not process the application in good time, there can be delays in setting up the bridging facility. The lenders are very anxious to get the facility in position for you and will do what is necessary to make this happen. You can assist by urging the fund administrators to expedite the application, in order that the benefit can be paid as soon as possible after the date of bridging withdrawal, so as to reduce the total discounting fee payable to the bridging company.
Apply for a pension bridging loan
THE BELOW FORM ONLY APPLIES TO PENSION BRIDGING LOANS. PLEASE ONLY SUBMIT THE FORM ONCE AND CHECK YOUR INBOX FOR A CONFIRMATION EMAIL.