The Road Freight and Logistics Industry Provident Fund offers loans to members for housing purposes – these are called pension-backed home loans.
The pension-backed loan enables members to use a percentage of their withdrawal benefit in the fund as surety/guarantee on the loan (in terms of Section 19(5) of the Pension Funds Act). First National Bank is the Pension-Backed Housing loan provider to the Fund.
The above mentioned funds allow members to use up to 60% of their resignation benefits for the following purposes:
- Buy a new home;
- Buy land;
- Building a new house;
- Improving an existing home (i.e. renovations and maintenance).
As with any loan, the loan needs to be repaid. The loan amount actually granted depends on the monthly repayments the member can afford and the amount the member has accumulated in the fund. Loan repayments are done via payroll deduction by the employer.
The employer must therefore be willing to sign an undertaking (payroll agreement) thereby agreeing to deduct the monthly instalments directly from the member’s salary, before members can apply for the loan.
Please ask your employer to send an email to FNB at email@example.com or they can phone 0860 762 278 should they agree to enter into this agreement.