Rudco Homeloans at 6%

[RKS Computer Solutions]

I was hoping your funny bone was getting tickled....

[Debbiedle]

I got into this one a bit late.

Hi Zulu, you mention that you know Rudco. How come you know so much about them?

My passion and enthusiasm lie with you on this one, let the small guys stand up and be heard.....................my finances tell me I need to be ultra cautious, play devils advocate and then think some more before I take any bold steps....

[zulu]

One thing that I have noticed in our country and maybe it is the same abroad - is that people do not want to see other's making a sucess.

Back to Rudco - I am sorry but this story is realy interesting, and I just have to say a few things. This small unknown company is suddenly very well known, and if the NCR finds no misconduct on the part of Rudco the newspapers actually did them a favour because now the whole country knows about them.

Why do people think the worst before exploring the possibilities. Just think of what this will do for us, the "normal" people, That is if you can call living off a tip and struggeling to survive each month normal.
It will be the start of a financial revolution. Instead of writing negative stories on the net and in the newspapers about Rudi Visagie, we should all start praying that this will actually work. Because I know that I could do with every bit of help available.

With that I will end this cession with a poem ---- "AGAIN" based on Sundays Rapport article. I am no writer but this story has my ceative juices flowing
Maybe I should put a copyright on it, I might become famous.

OK here we go

While Rudi's money is rolling in from the states.
The banks are discussing his ITC credit rate.
He failed to pay Metcash & carry.
maybe he forgot after to many wiskey's with harry.
America Swiss was also on the list.
but the bells and soda got him totally pissed.
Who could blame him for not paying his debt.
With parties like that I'd also spend a few weeks in bed
The NCR is going to investigate the case
I hope it will be on a wild goose chase.
Bonds at 6% is nothing to laugh at.
If it is true, get ready to eat your hat.
I believe that Rudi has dealt the banks an ace.
But reporting on his personal life is a slap in the face.
Newspapers and banks are all the same.
like the chinese mafia they enjoy playing games.
To me these people have no class.
And all the stories will come back to bite them in the ass.

I think this is my best so far. What do guys say.personally I feel that I at least deserve a 7 out of 10 don't you think?

[zulu]

I got into this one a bit late.

Hi Zulu, you mention that you know Rudco. How come you know so much about them?

My passion and enthusiasm lie with you on this one, let the small guys stand up and be heard.....................my finances tell me I need to be ultra cautious, play devils advocate and then think some more before I take any bold steps....

I make it my business to find out as much as I can, then to report back on my findings. It is not difficult to find out about the company if you just spend some time talking to somebody that is working for them. It is true that their are some over eager agents that are spreading stories about Rudco and the newspapers are using this to discredit Rudco. But my personal feeling is that we have not seen half of what these boys at Rudco are capable of.

The newspaper reported on one lady that did not receive all her money. I think they should have a look at how many complaint about insurance companies and banks there are with the ombudsman complaining that they have lost money. If they publish all of this we will be able to get into the the record books for the largest newspaper ever published.
For all te guys spreading negative news, put that in your pipe and smoke it.

We all complain about about the financial industry, but now that somebody actually has the balls ( sorry for the language) to take them on. we dont want to support them but rather complain about them as well. What is up with these people???

[leuce]

I heard about Rudco about 4 months ago. I was so excited because it meant that I could get a loan at a much lower rate. In the end I decided not to go for it because Rudco is too secretive about where the money comes from.

Here is what I had been able to find out:

* There is really no 6% interest rate. It is just an example rate which is used to lure potential clients. In reality, the loan is interest-free. Your monthly payment are a fixed about plus an administration fee.

* Your contract with Rudco is for 20 years' worth of administration. You can pay off your loan sooner, but you'll be liable for the balance of 20 years' fees regardless. With a bank, if you pay your loan quicker, you end up paying less, but with Rudco you don't pay less simply because you pay quicker.

So if you borrow R300 000 from Rudco, you have to pay back R480 000, regardless of whether you pay back in 5 years, 10 years or 20 years. If you borrow R600 000, you have to pay back R960 000. If you borrow R900 000, you have to pay back R1 260 000.

Now say you buy a flat for R300 000, and you want to sell it again after 3 years. If the flat's value increases by 15% per year, you can sell it for R450 000. If you had a Rudco loan at the so-called 6% interest rate, you'd make a R30 000 loss on the sale. If you had a bank loan at 14% interest, you'll make R50 000 profit on the sale.

[zulu]

I heard about Rudco about 4 months ago. I was so excited because it meant that I could get a loan at a much lower rate. In the end I decided not to go for it because Rudco is too secretive about where the money comes from.

Here is what I had been able to find out:

* There is really no 6% interest rate. It is just an example rate which is used to lure potential clients. In reality, the loan is interest-free. Your monthly payment are a fixed about plus an administration fee.

* Your contract with Rudco is for 20 years' worth of administration. You can pay off your loan sooner, but you'll be liable for the balance of 20 years' fees regardless. With a bank, if you pay your loan quicker, you end up paying less, but with Rudco you don't pay less simply because you pay quicker.

So if you borrow R300 000 from Rudco, you have to pay back R480 000, regardless of whether you pay back in 5 years, 10 years or 20 years. If you borrow R600 000, you have to pay back R960 000. If you borrow R900 000, you have to pay back R1 260 000.

Now say you buy a flat for R300 000, and you want to sell it again after 3 years. If the flat's value increases by 15% per year, you can sell it for R450 000. If you had a Rudco loan at the so-called 6% interest rate, you'd make a R30 000 loss on the sale. If you had a bank loan at 14% interest, you'll make R50 000 profit on the sale.

Good day

I do not want to be rude, but whoever gave you this information has no idea what they are talking about. We received a copy of the loan agreement that will be signed if your bond is approved and took this to the attorney. They could not find any problems with the contract. The interest is calculated in the same manner as the banks, and the same rules apply to the early settlement of the loan. All NCR regulations have also been met according to the attorneys.
The fixed monthly admin fee was used but this changed as soon as the new credit act came into effect, and they had to charge an interest rate.


Maybe you should do yourself a favour and look at the conract if you can find one you will see the real picture.

I think your "agent" needs some training on their products.

[leuce]

The fixed monthly admin fee was used but this changed as soon as the new credit act came into effect, and they had to charge an interest rate.

I doubt if what you've been told, is true, for these two very simple reasons: (1) Rudco only started giving out loans after the NCA came into effect, and (2) the Act and its regulations weren't a secret before the Act came into effect.

Therefore Rudco would have known from the start (and from the point of their giving out their first loan) what the requirements of the Act would be, and there would have been no reason for them to "change as soon as the new credit act came into effect".

Maybe you should do yourself a favour and look at the conract if you can find one you will see the real picture.

Perhaps you could post the contract here, as an attachment in the forums, and I'll do just that.

[Dave A]

Perhaps you could post the contract here, as an attachment in the forums, and I'll do just that.

I was thinking that might be useful in clarifying this, too. It's all a bit speculative without a copy of the contract to peruse. Is there any hard evidence to support either positiion?

[zulu]

Here is the part of the contract the specifically deals with the interest and early settlement. The contract is lenthy and includes the quotation part as prescribed by the NCR and also all the other explanation of terms etc. I will post the parts as we go along with the conversation.

(n) BORROWER'S RIGHT TO TERMINATE
The BORROWER may terminate this Agreement at any time by paying an amount equal to the aggregate of :

1. the unpaid balance of the principal debt as at that date ie the date of repayment; and

2. all unpaid interest and all other fees and charges due or payable by the BORROWER to RUDCO in terms of this Agreement up to and including the settlement date; and

3. an early termination charge in an amount equal to :

3.1 the (maximum) early termination charge prescribed under the National Credit Act from time to time where a fixed rate is applicable; or

3.2 no more than the interest that would have been payable under this Agreement for a period equal to the difference between :

3.2.1 three months; and

3.2.2 the period of notice of settlement (if any) given by the BORROWER.

If you check your mortgage agreement from the bank this is exactly the same. I am also a sceptic but could not find anything wrong during my attorney's search. Everybody seems to have their own story to tell and some of them are so far fethched that they should be in a harry potter book.

I won't try to pursuede anybody to go to Rudco all that I am saying is that people should stop listening to crap and do some research for themselves.

[duncan drennan]

* There is really no 6% interest rate. It is just an example rate which is used to lure potential clients. In reality, the loan is interest-free. Your monthly payment are a fixed about plus an administration fee.

* Your contract with Rudco is for 20 years' worth of administration. You can pay off your loan sooner, but you'll be liable for the balance of 20 years' fees regardless. With a bank, if you pay your loan quicker, you end up paying less, but with Rudco you don't pay less simply because you pay quicker.

It would appear (from my uneducated perspective) that the contract and the two statements are not in contradiction. If the principal amount is the full loan amount over 20 years, and no interest is charged, then settling the principal amount would still be the full value of the loan + "interest", as described by leuce.

It is certainly an interesting concept, and possibly quite well suited to a lot of people, so I'm interested to find out more.

Zulu, could you possibly post the part about how the principal amount and interest are determined?

[zulu]

It would appear (from my uneducated perspective) that the contract and the two statements are not in contradiction. If the principal amount is the full loan amount over 20 years, and no interest is charged, then settling the principal amount would still be the full value of the loan + "interest", as described by leuce.

It is certainly an interesting concept, and possibly quite well suited to a lot of people, so I'm interested to find out more.

Zulu, could you possibly post the part about how the principal amount and interest are determined?

As you will see, by the quote below. The principal debt does not include the interest. Interest is calculated dayly exactly the same as as with the banks

PART A : AMOUNT AND DETAILS OF MORTGAGE LOAN –Principal Debt (which includes the following) :
1. Cash Amount of Loan being part of the deferred amount R________
2. Initiation fee (if BORROWER declines offer hereby granted to make payment separately) R__________________
3. *Bond Registration Fees and Disbursements (if applicable) R__________________
4. *Transfer fees and disbursements R__________________
5. *Valuation Fee in respect of property offered as security for loan R__________________ Total Amount of Principal Debt : R_______________All the fees mentioned above are exclusive of VALUE-ADDED TAX (“VAT�) thereon which will be added thereto for payment by the BORROWER.*NOTE : These items will not form part of the principal debt if the loan relates to switchinga Bond from another institution and will be paid by the BORROWER when due in terms of the Mortgage Loan Agreement.

PART B : INTEREST RATE QUOTEDA fixed rate of ______________________% per annum payable over the period of the loan calculated on the Total Principal Debt and the balance thereof outstanding from time to time.

This part as well

3. Interest calculated daily as aforesaid will be added to the deferred amount monthly on the last day of each month during the term of the loan until repayment thereof in full. In the final month of the period interest will be added to the deferred amount on the last day of the said period

Sorry for the spacing but for some reason I cannot paste the document correctly. I hope that this answers soe questions.

[zulu]

I just wanted to add the following.

I sent the loan agreement to two different attorney firms, and both of them looked at the agreement, and said that it is a normal loan agreement with no
funny stuff.

Interest is calculated daily and then added to your bond at the end of the month in the same maner that the bank would do.
The bond is then also registered in the clients name, the same as the bank would do.

[duncan drennan]

I realised that there is something we failed to look at at all in this thread - where does the profit come from?

Maybe I'm stupid and don't understand these things at all, but if CPIX is around 6% and you are loaning money out at 6%, where does the profit come from? There is no margin on the loaned money (in fact the margin is negative at the moment), so effectively you are losing each money month (inflation is outstripping the growth of your money).

Where do their profits come from?

[mike07]

loan

I realised that there is something we failed to look at at all in this thread - where does the profit come from?

Maybe I'm stupid and don't understand these things at all, but if CPIX is around 6% and you are loaning money out at 6%, where does the profit come from? There is no margin on the loaned money (in fact the margin is negative at the moment), so effectively you are losing each money month (inflation is outstripping the growth of your money).

Where do their profits come from?

Good point I never realized that at 6% it wouldn't showmuch profit. I need to apply for a home loan soon as I am purchasing a house so I hope I myself can get 6%. I'm sure they have profit coming in from some source.

[Dave A]

I think this is where the controversy comes from. Chances of finding investors locally for a fixed return of less than 6%, even if it is a 20 year bond, is pretty slim. But they can be found overseas. The catch is one would expect that to be in the currency of origon. Which brings foreign exchange rate fluctuations into the equation.

I was idly wondering about bond issues being a possibility. You could find investors on a low return if there were prospects of trading them on a drop of interest rates down the line. But right now the short term prospects seem to be the other way.

It all is a little fascinating.