FNB has opened up applications for individual solar loans tied to the government’s Energy Bounce Back Loan Guarantee Scheme.

The scheme was announced by the National Treasury earlier this year and is administered by the South African Reserve Bank.

The aim of the scheme is to help customers mitigate the impact of power supply challenges and load shedding by giving them easy access to financing at a lower interest rate.

The loan scheme was open to commercial users earlier in the year, but individual loans have only become available in recent months. Standard Bank activated its personal loan applications in September, with FNB launching its offering this week.

According to FNB, the loan for individuals is considered a personal loan and will initiated at a personalised interest rate, but once proof of use is verified – ie, the bank verifies it will be used for solar panels and related expenses like inverters – the rate will be dropped to prime plus 1%.

At current rates, this would be an interest rate of 12.75%.

Businesses and commercial customers can take loan options between R10,000 and R10 million, while individuals will be limited to R3,000 to R300,000.

Notably, the loan scheme doesn’t activate in the typical way and comes attached with a host of terms and conditions.

  • In order to access the benefit, customers will first need to obtain a quote from a reputable solar supplier.
  • They will then need to apply for an FNB Personal Loan.
  • The loan amount must not exceed R300,000 and must also be within 90% of the invoice received.
  • Applicants will be quoted on a personalized interest rate.
  • After the personal loan has paid out, customers will need to pay a deposit to the supplier.
  • Once the deposit has been paid, they will need to log onto the FNB App to activate the benefit.
  • The interest rate will only be lowered on the FNB Personal Loan once the benefit has been activated and all supporting documentation is received and verified.
  • Activation may take up to 10 business days.
  • The rate will only be effective from the date of activation and will not backdated.

Other requirements for the loan include that the funds must be used for solar panels and other solar-related expenses. Solar-related expenses can include batteries, inverters, and installation costs.

According to FNB, the invoice must include solar panels as part of the quote.

“Solar must be part of the solution being financed. If there is no generation on the invoice, the loan will not be converted.”

This is in line with the National Treasury’s overall goal with opening up financing for solar – as well as the rooftop solar tax incentive – which is to increase energy generation in the country.

Benefit must be activated within two months (60 calendar days) after payout on the FNB Personal Loan.

“As per National Treasury, only one credit product per customer will be allowed to benefit from this scheme. This means if you’ve already taken up a solar benefit credit product with us or with another bank you will not qualify for this benefit,” FNB said.

Source: businesstech.co.za