When you’ve been in a motor vehicle accident and suffered damages or injuries, the Road Accident Fund (RAF) is legally mandated to pay you compensation.
Unfortunately, RAF settlements are subject to increasingly long and unpredictable delays, potentially leaving accident victims in financial distress.
This is where RAF bridging finance steps in. It’s a source of immediate financial relief for accident victims and their families.
Average waiting times and delays for RAF payments
Why the wait? Administrative challenges and systems glitches have led to a significant backlog of claims at the RAF.
Even when the registration of a claim goes smoothly, the RAF has 120 days in which to investigate the accident and conduct an independent medical assessment of your injuries.
Investigations are seldom completed within this period.
Once the 120 days has elapsed, a summons is issued to the RAF. At that point, the RAF may offer an initial settlement amount, which you can accept or reject.
If you reject the offer, and the RAF is unwilling to negotiate a better deal, the matter proceeds to court. However, securing a date for a court hearing can take several months.
The court process itself is lengthy, due to the unavailability of expert witnesses, mislaid documents and/or disputes over the cause of the accident.
In some cases, the judge may rule in your favour, but set a later court date to quantify the compensation payable by the RAF. Once that has been determined, the RAF has 180 days in which to settle the claim in full.
When all the delays are taken into account, it’s unsurprising RAF claims can take up to six years and more to resolve.
Financial pressures when waiting for your RAF settlement
Besides the physical and emotional trauma suffered, you may not have the funds available to cover medical expenses, hospital and rehabilitation costs, legal fees and repairs to your vehicle.
The lack of funds can create intense anxiety and hamper your chances of a full recovery.
Depending on the nature of your injuries, you may be unable to work. Daily living expenses can mount up. Repayments on long-term debts may have to be missed simply because there is no income.
This can leave you and your family financially vulnerable.
RAF bridging finance allows you to access a portion of your anticipated RAF settlement in advance. It’s a financial lifeline that can be used to cover outstanding expenses without having to take on additional debt.
How RAF bridging finance works
Once a settlement has been negotiated or awarded by the court, you can apply for RAF bridging finance by contacting a reputable finance provider.
A consultant is assigned to you to assist with the application process, and liaise with the attorney handling your claim.
On approval of your application, funds are transferred into your bank account. Your attorney pays the finance provider directly once the RAF has made its payout.
When and why you should consider RAF bridging finance
Bridging finance is the go-to solution when you don’t have reserve funds or savings.
It allows you to cover expenses, maintain your quality of life and support your family without taking out a personal loan or expensive line of credit.
Important considerations
RAF bridging funds are only available to claimants who have used the services of a registered attorney, have been awarded compensation, and are waiting to be paid out.
The settlement amount must be confirmed, as the available funds are a percentage of that figure.
Although RAF bridging finance can provide immediate financial support, it’s important to consider:
- the interest and fees associated with the transaction
- the repayment terms, and whether they correspond to the expected timing of the RAF payout
- the reputation of the funder. Is it a properly registered and accredited financial services provider?
Choosing a trusted RAF finance provider
Dealing with a trusted finance provider goes a long way to alleviating unnecessary stress. Ideally, use a funder that specialises in RAF bridging finance, and offers personalised assistance and support.
When there is full transparency around fees and terms, and the company is accredited by and compliant with the regulations of the National Credit Regulator, you know it’s a reputable funding partner.
Lamna is a registered finance provider with branches around the country. Our quick and discreet funding solutions range from vehicle finance and asset-based loans to Road Accident Fund bridging finance.
Call us on 086 111 2866, send us a WhatsApp or contact us online, and we’ll get back to you right away.
ILLUSTRATIVE EXAMPLE
Client borrows R10,000 for 90 days.
Loan Amount | Repayment Period | Monthly Interest | Total Cost of Loan | Initiation Fee | Monthly Fee | APR |
---|---|---|---|---|---|---|
R10 000 | 3 months | R500.00 | R2 914.50 | R1 207.50 | R569.00 | 60% |
Fixed rates range from 36% to 60% APR and payment terms range from a minimum of 3 months to a maximum of 24 months. Apart from the initiation and monthly fees shown in the table, the only additional fee is credit life insurance if the borrower does not have this already.
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