Hi guys,

Two years ago I took a R200 000 personal loan with African bank. I had bad credit and the interest rate I got was 24.5%. I could and still make the payment (R6000) but recently I calculated the interest I have been paying. It’s too much and it’s safe to say it has been my school fees. Basically, after 2 years the principal is at around R161 000 but I have paid R144 000 already.

I revisited the contract and saw the loan has a Guardrisk credit life policy charged at 5% (annually) of the principal debt. So on my payment, there is about R835 going to this policy.

I’m expecting a lump sum at the end of this month and can pay R100 000 towards this loan. I will then be able to clear the balance in 5/6 months.

When I took the loan, I didn’t have any Life cover but now I do. I have also added Retrenchment cover as well. So my life cover has all the things that the credit life policy has.

My question is: Is it worth pursuing credit life policy replacement i.e. calling African bank and asking them to remove the Guardrisk policy and put my life cover instead? And has someone done a similar exercise?