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Bondpro Loans

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Applications within certain broad credit parameters as laid down by Bondpro are sourced from various sources (mainly from its own and affiliated websites) as well as from selected mortgage originators and debt councellors.
 
Bondpro customers are generally considered to be the core middle market (80% of applicants earn between R10 000 and R40 000 per month).
The size of loans is generally not less than R200 000 and not greater than R2.5m with an average of approximately R500 000. At the end of the administration period, no loan exceeds 70% of the property’s market value. However, a mortgage bond is registered on the full value of the property. There is therefore at least 28% equity in the property to cover Bondpro in the event of a default.
 
Two key ratios are determined on each applicant before they can become clients of Bondpro:
  • The payment to income ratio (PTI). The maximum acceptable ratio at Bondpro rates is 36%, although the average is currently 25%. This ratio refers to the monthly payment instalment in relation to the customer’s gross monthly income.
  • The debt to net income ratio (DTI). This is established by dividing the total monthly amount that the applicant needs to service all monthly debt commitments by the customer’s net income (i.e. gross income less statuary deductions). In Bondpro’s case, this must not exceed 60%.
    Successful applicants are accommodated for a period of 9-20 months after which Bondpro reintroduces the ‘bank compliant’ customer back to a formal financial institution. Bondpro also provides the facility to carry performing loans for longer periods.
     
    Bondpro’s credit assessment department ensures that applications are properly scrutinized and that only those that meet the credit criteria of Bondpro be forwarded for processing. The processing function includes the settlement of the current outstanding mortgage, other outstanding loans/debt, removal of bad records at credit bureaus, getting judgments rescinded where applicable, administer the debit order process and secure the registration of securities.