A precedent for the conditions sets out all the conditions. One condition could be z.B. a condition that the borrower sign an agreement to bring all contract disputes to arbitration. You must assess the creditworthiness of a potential borrower before making loans or significantly increasing the loans already granted. This should be based on sufficient information, possibly obtained from the borrower and, if necessary, from a credit reference agency. In the case of pawnshops, the loan is paid and the borrower provides collateral assets with a resale value greater than the credit. The creditor has the right to sell the property if the money is not repaid on an agreed date and to retain the proceeds of the sale. As part of a credit guarantee, a third party agrees to pay a creditor, on request, the amount owed by a consumer (for example. B in the case of a guarantee that provides a personal guarantee on another person`s debts from an excess cheque account). Institutional credit transactions also include revolving and non-renewable credit options. However, they are much more complicated than retail agreements. They may also include the issuance of bonds or a credit consortium when several lenders invest in a structured credit product.

The creditor must provide the consumer with a free copy of the signed credit contract (on paper or in printable electronic form). A credit provider must not use an identity card, credit or debit card, access card or PIN to obtain a credit agreement or to recover the contract. A violation of this provision is punishable. Auxiliary credit contracts are not covered by the definition of credit contracts in the act. Section 5 defines the limited provisions of the law that apply to them. Overall, the strength of the national credit regulator, the extensive powers of the National Consumer Court and the courts, the almost paternalistic tendency of lawmaker protection and the vast network of dispute settlement accounts for consumer legislation, which will have a huge impact on the huge credit industry in South Africa. [12] Revolving credit accounts generally have a more streamlined application and credit contract process than non-renewable loans. Non-renewable loans – such as private loans and mortgages – often require a broader demand for credit. These types of credit generally have a more formal lending process. This process may require that the credit contract be signed and accepted by both the lender and the customer during the final phase of the transaction process; The contract is considered valid only if both parties have signed it. A: Under the terms of the contract, you can pay the rest of the loan to terminate it prematurely. Some charge extra for this, but if you decide you no longer want or need a credit within 14 days of the loan, you can get an extra time that will allow you to return the borrowed money and cancel the loan.

The new credit limits have a negative impact on small loans. The smaller the credit, the more expensive it is. A one-month R500 loan costs about as much as the typical thirty percent per month that is calculated before the law. Small credits will be even more expensive. An R200 loan costs 46 per cent per month (552 per cent per year), more than nine times the maximum interest rates of five per cent per month.