Penalty Interest Charges

ABSA:

Penalty interest will be charged to a client when switching the existing Absa bond to another financial institution or if the property is sold (the number of years no longer applies)
If the cancellation of the bond takes place 90 days after we've been notified of the intention of the client in writing - no fee will be charged.(new bonds must be at least 90 days old before notice can be given)

However if the cancellation takes place prior to the 90 days a pro rata calculation will be made.(Eg Notification date 1 July cancellation date 13 August - 90 days window date -28 September).
Calculation:Bond amount outstanding R200K, Interest rate 13.5% -R200K x 13.5% divided by 365 days =R73.97 per day X 46 days = R3 402.74

If the outstanding balance is nil then no penalty interest will be charged and if the client replaces his bond with a new absa bond (within 6 months of cancellation) then penalty interest will be either be waived or repaid to client.


FNB:

An early settlement fee is charged when 90 days notice has not been given.
In the case where no notice has been given, provision is made for 3 months interest and calculated on the settlement balance.

This will be calculated at your current interest rate against your bond, effective from the day that those figures were issued to the attorneys.(Eg should your balance be R100 000.00 and your interest rate is 10,50% for 90 days =R2 589.04).

Should the bond be cancelled prior to the 90 days period, you are then liable for the remaining number of days.

If the bond is cancelled after the 90 day period, then the full amount will be waived.


NEDBANK:

There is a 90 days waiting period. If a bond is 3 years and older no penalty interest will be charged. If the client cancels before the 90 days are over he will not be penalized.

If a bond is 3 years and below, there will be penalty interest charges. If the client cancels within the first 3 months he will also be liable to pay interest charges.

Calculation Formula : Outstanding balance X interest rate charged devided by 365 days X 90 = Penalty interest charge.


STANDARD BANK:

In accordance with the NCA, notice has to be given on all bonds. Irrespective of when the bond was registered. Example - it does not make a difference whether the bond was registered 5 years ago or last week.

The penalty interest is calculated as follows: We only charge pro rata, so if notice has been given but not expired, we will calculate on cancellation how many remaining days of the notice is left and calculate only on the remaining number of days.

Notice is calculated on: The balance (when notice was given) X the interest rate divided by 365 X 90 (or remaining number of days)