Wondering How Does FNB Budget Facility Work? Well, here is the guide to give you all the details.
First National bank offers several products to their customers, but they don’t understand how it works.
If you among FNB customers searching to know how the FNB budget facility Works, you have come to the right place.
You’ll find this quick guide useful as there are details about the FNB budget facility ranging from what it is all about to how it works.
More so, I’ve used simple terms for easier understanding.
What Is The FNB Budget Facility In South Africa?
FNB budget facility refers to where you are obligated to pay a large amount of money with stipulated months in installments at a reducing balance.
The FNB budget facility is offered when you are buying a house or a car and you are offered a loan but is under the budget facility.
In simple terms, a budget facility is like a loan, and you are required to pay a certain fixed amount per amount over a certain period.
The bank stipulates the terms, and upon the agreement, you are obligated to adhere to them. Failure can result in affecting your credit score.
How FNB Budget Facility Works
After you have qualified for the FNB budget facility are issued with the loan, it is bank expectations you adhere to agreed terms.
As a credit cardholder, you are required to pay a minimum upfront amount and then the remaining amount on a fixed amount in reducing balance with the agreed time.
The advantage of this type of credit is that you are given enough time to repay the credit.
On the setback side, there is like the hood of paying more interest rates on credit used.
The fact that you’re given adequate time to manage your credit, the budget facility can be costly due to the high interest rate and can be detrimental to your credit rating.
On a positive note, the budget facility is particularly dangerous as it creates a “buy now and pay after” philosophy leading to the illusion it is a better deal.
The reality is that the pay later part can be very costly because you pay high interest on the money you borrow.
If a few payments are missing, this can lead to an uncontrollable spiral of debt.
Conclusively, the budget facility works like when you take out a loan and use it to purchase an item and pay the loan in installments.
The bank carries an evaluation of your qualification before issuing the credit. Hence your credit score should be at a good rating.
That is all you must know about how does FNB Budget Facility Work.
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