Old Mutual is a financial services group rather than a single lender, and the products people describe as “Old Mutual loans” are not all the same thing. An unsecured personal loan, a facility against a long-term policy, and a withdrawal from retirement savings are three separate decisions with three very different consequences.
Confusing them is expensive. The first is ordinary credit. The second depends entirely on your product’s terms. The third permanently reduces your retirement provision and is taxed.
Eligibility Requirements at a Glance
For an unsecured personal loan, the criteria are the ordinary ones.
- Be 18 years or older
- Hold a valid South African ID document or smart card
- Have a regular, verifiable income paid into a bank account in your own name
- Be permanently employed, or have verifiable self-employed income
- Not be under debt review, sequestration or administration
- Have a working cellphone number and a verifiable residential address
Income and Affordability Requirements
For a personal loan, affordability determines the amount and the term.
The Act requires an affordability assessment before credit is granted: the provider must verify gross income, subtract statutory deductions such as PAYE and UIF, subtract the minimum living expenses prescribed in the affordability assessment regulations, and subtract existing monthly debt repayments. Lending without that assessment is reckless lending and is prohibited.
Borrowing against a policy is different. Some long-term insurance and investment products build a surrender or cash value against which a facility may be available; many, including most funeral policies, do not. Do not assume value has accumulated — ask the product provider in writing whether your specific policy has any, and what borrowing against it costs and does to the eventual benefit.
Drawing on retirement savings is different again. A pre-retirement withdrawal is taxed, permanently reduces what you will have at retirement, and cannot be reversed. Under the two-pot retirement system, savings-component withdrawals are subject to their own rules and tax treatment. Get the specific consequences from your fund before deciding.
A longer loan term lowers the instalment and raises the total interest. Ask for the total repayable at two or three terms and compare those totals.
Credit and Financial Requirements
For credit, your bureau record determines approval and the personalised rate.
The agreement is regulated by the National Credit Act 34 of 2005 and the provider must be registered with the National Credit Regulator (NCR). Verify registration free of charge at ncr.org.za before you sign.
Holding policies with the group does not by itself qualify you for a loan, and a policy is not usually the security for an unsecured personal loan. That is a common misunderstanding worth correcting before you apply.
Credit life insurance is standard on unsecured lending and settles the balance on death, permanent disability or retrenchment. You may substitute your own policy of equivalent cover; ask for the premium quoted separately.
Before touching long-term savings for short-term needs, take advice. A licensed financial adviser, or your fund’s own benefit counselling service, can set out what a withdrawal costs in tax and in eventual benefit. That conversation is usually free and the decision is irreversible.
Documents and Verification Required
The documents depend on which product you are pursuing.
- South African ID document or smart card
- Latest payslip, or the latest three where income varies
- Latest three months’ bank statements showing income deposits
- Proof of residence not older than three months
- Banking details for payout and the debit order mandate
- For policy or fund matters: the policy or membership number and the product terms
- For self-employed applicants: six months’ statements and financial statements
How to Apply and Improve Approval Readiness
Establish which product you are actually being offered before comparing anything else, because the three are not comparable on price alone.
- Ask in writing whether a policy has any surrender or loan value before assuming it does
- Get the tax and benefit consequences of any retirement withdrawal from your fund, in writing
- Draw your free annual credit report from each bureau and dispute errors
- Ask for the total repayable amount at more than one term
- Ask for the credit life premium quoted separately
- Take financial advice before reducing retirement provision to meet a short-term need
Frequently Asked Questions
Does holding a policy qualify me for a loan?
No. An unsecured personal loan is assessed on income, affordability and credit record. Holding a policy is a separate relationship.
Can I borrow against my policy?
Only if the specific product has surrender or cash value. Many policies, including most funeral cover, do not. Ask the provider in writing.
What does withdrawing from retirement savings cost?
It is taxed and permanently reduces your eventual benefit, and it cannot be reversed. Get the specific figures from your fund and take advice before deciding.
Can I settle a personal loan early?
Yes. Request a settlement quotation. Early settlement reduces the interest and fees payable over the remaining term.
Product terms, tax treatment of retirement withdrawals and lending criteria change. Confirm current details with the provider and your fund, and take financial advice before drawing on long-term savings.