Insurance companies have introduced it, many other industries use it, why then haven’t our local banks introduced a refund or bonus system into their home loan products?
The idea is quite simple really, if it costs a lot of time and money to repossess a property why not incentivize your clients to maintain their bond accounts.
image by woodleywonderworks
The main goal of this type of offering would be to reduce the number of missed debt orders and to promote a homeownership. Insurance companies use this system to reduce the number of clients that they would need to service. Even a unsuccessful claim is a cost to the insurance company, who needs to employ staff to process those claims.
The banks could benefit in a similar way by reducing the number of debt collecting staff needed.
I would think that a system like this would be relatively easy to deploy. All they would need to do is calculate how much they would save if everyone paid they bond on time and in full, then use a percentage of that amount to incentivize their clients.
Would you not feel more encouraged to payoff you bond if you knew you have a cash reward waiting for you at the end of the road?
Certainly the bank would also attract more clients to their doors, with a offering likes this.
And, wouldn’t this help to rid the image that banks are only out to protect their own interests?
Do you feel a homeloan reward system like this would work in South Africa?
Please share your views, comments and questions with us.