BBS launches loan consolidation scheme

LEKOPANYE MOOKETSI
Correspondent | Friday October 3, 2008 00:00

The company's head of corporate affairs, Sipho Showa said the mortgage bank offers customers an opportunity to consolidate their loans at reasonable interest rates. He said the rates are both below the prime-lending rate at 14.5 percent for people aged 30 years and below and 15.25 percent for the general public.

Showa said loan consolidation eliminated multiple payments and allows a borrower to make an affordable single monthly repayment to one lender. He said BBS will be able to refinance loans, by way of loan consolidation from other institutions such as commercial banks as long as the customers avail the latest valuation of their property.

The value of the property is the basis for determining the extent of the amount requested. 'Mortgage remains security.  It determines the amount that you could be loaned.  Even if you have a mortgage with another bank, you can bring it here and then consolidate your loan,' he said.

BBS require settlement statements from other lenders, a three months bank statement and recent pay slip or some other proof of income to consolidate the loan. Showa said only people who own property qualify for the loan consolidation.  He said the response to their latest product has been encouraging.

He asserted that the move to introduce the loans consolidation scheme does not mean BBS is going beyond its mandate. He said neither the BBS Act nor rules prevent the bank from making advances other than the acquisition of immovable property or the erection and maintenance.

He said BBS can offer any advances  as long as they are made against the security of mortgages or against the security of deposits with shares in the society.

'Loans consolidation is therefore only possible with the applicant's mortgage as security.  That is why we are saying that customers have to value their property so that we can advise them on the extent to which they can consolidate their loans,' he said.The loans consolidation scheme comes after BBS launched Pinagare home loan scheme. The scheme is aimed at encouraging home ownership for young people aged 30 years and below.