Name Three Ways In Which The Credit Agreements Act Provides Protection To A Credit Receiver
// 11 апреля 2021 // Без рубрики
Steve van Wyk, Seeffs MD at Centurion, says the law mostly limits the potential of South Africans to borrow too much and prevents loan providers like banks from providing irresponsible loans. Consumers can pay in advance any amount owed under a credit contract (for example. B payments due) and credit providers are required to accept these amounts, even if they are not due. These payments are first used for unpaid interest and fees, and then for the reduction of the main debt. The NCA sets a cap on the maximum amount a credit provider can charge for other fees, such as introductory fees, monthly service, and default and collection charges. While a credit policy is allowed, fees must be “reasonable” and the consumer may benefit from or transfer existing insurance coverage. LOAN APPLICATION The National Credit Act requires credit providers to provide simple contracts that are easy to understand, in two official languages and the consumer must receive a free copy. On request, consumers are also entitled to a reason if the credit provider refuses to lend. The NCA requires credit providers to perform due diligence to ensure that the consumer can afford the loan and all loans must be registered to prevent consumers from being over-indebted. RECKLESS LENDING credit providers violate the NCA and may be found guilty of granting reckless loans if consumers` ability to pay for credit repayments is not assessed before granting loans. Credit providers can face heavy penalties and even lose their right to recover the debt if they are found guilty of reckless loans.
However, consumers who have not fully and honestly completed the credit application are not protected by the NCAAs. THE COUNSELLOR DEBT – COUNSELLING The National Credit Act gives consumers the right to request financial and debt advice if they are unable to repay their debts. The Debt Advisor (DC) is registered by the NCR after a successful course and audit close. Debt advisors will help over-indebted consumers restructure/reorganize their debt repayments, which can be voluntary or give a court injunction. The law pursues the ambitious and extremely difficult goal of promoting a competitive, efficient and efficient credit economy and a fair, transparent, accountable and accessible market. The main theme of the law is consumer protection. Section 3 of the Act contains a number of methods used by law to achieve this objective. Some information about credit contracts concluded before the law came into force must also be provided. This registry is available to anyone who requests it in the prescribed form. It will also provide a way to monitor South Africa`s debt, as the NCR is required to do. It is very easy for credit to create financial difficulties and destroy a household`s wealth. The additional borrowing to repay existing loans can lead people into a debt spiral from which they may find it difficult to escape.
Over-indebtedness has a negative impact on families and, in some extreme cases, has even led to suicides within the family. Over-indebtedness continues to affect the workplace, can lead to dismotivation, absenteeism and even a propensity to steal. The National Credit Act effectively limits the interest rates, fees and other fees that credit providers can charge based on the type of credit and the date the loan is granted. In most cases, the maximum interest rate is based on a formula that depends on the SA Reserve Bank Repurchase (Repo) rate at the time the loan is granted. Essentially, there are seven categories of interest rates, namely mortgage contracts; Credit cards/installations unsecured credit transactions Short-term credit transactions Development credit contracts; other credit and ancillary credit contracts.