In the past you may have experienced firsthand interest rate charges as high as 100%, or you may have heard friends tell you horrific stories. Some of you might have seen the story ran by Carte Blanche detailing how consumers where sometimes led into signing Micro Loan contracts instead of the normal Hire Purchase (Instalment Sale Agreements) all for a better profit at the poor consumer’s cost.
What has the National Credit Act done for us with regards to this subject?
- Maximum interest charge = 5% per month (as opposed to uncapped pre NCA!)
- Maximum initiation fee =
- R150 per credit agreement, plus 10% of the amount of the agreement in excess of R1, 000.
- But never to exceed R1, 000.
- R150 per credit agreement, plus 10% of the amount of the agreement in excess of R1, 000.
- It is definitely illegal for a micro lender to keep a consumer’s bank card. (Section 91 and 90 (l)(ii) of the NCA)
Now that you know all this you should shop around and compare offerings!! It is your hard-earned money you know.
This does get technical and if you are inclined that way you can visit the National Credit Regulator to read the credit regulations as there may be supplementary conditions.
Additional to the charges of 5% interest and R150 initiation fee for the first R1,000.00 there are a R50.00 service fee that can be charged for each agreement on a monthly basis.
Thank you Wouter!
You are absolutely correct. In terms of section 105(1) of the NCA and section 44 of the Credit Regulations the maximum monthly service fee is R50 which can be charged annualy or per transaction…
L8r!
hi what if prior to to microloan act i already am paying heavy interest an this via a judgement garnishee.i am currently having to pay only 1 judgement out of 3 yet the paid up judgements still reflect. also i changed employee to current 1 an my garnishee has stopped, i signed it years back an requested paper work or copy of what i signed , requested from lawyer`s but to date received non an when i called on numerous occasions i was referred to all in building with either been told i am not entitled to paper work or will be called back but no avail,the lawyer in question is gerhard van de merwe, i feel im paying much more than i paid in 1st place plus lawyer`s interest the loan company is lantern finance, the reason for garnishee is my account changed from savings to cheque an bank said i have to call lantern to get debit order reinstated but i never had conact details to get hold of them an place i made loan ta initially was no longer there so i didnt know what to do , today im wiser an more educated as to procedures, please advice
Hi Ismael,
I will do my best to answer your questions.
The law cannot be applied retrospectively, however you can check with the National Credit Regulator regarding interest on microloans granted pre-NCA.
Regarding the paid-up judgments that appear on your credit report, please click here to read this comment. Basically you can get those removed.
Perhaps you might want to go straight and speak to the Credit Information Ombud as your case is very unique, click here!
Regards.
You are all missing the point here. The NCA do provides for certain aspects of credit agreements to be outlawed, but the furniture retailers do not calculate their interest charges wrong on the agreements - no sir! They recalculate their interest charges on their monthly statements AND on the so-called credit life insurance premiums, WHICH according to section 106(5)(a) is illegal. The Ellerines Group is a specific culprit and the NCR is doing nothing. Just try and work out their interest charges per mont and you will see how much money they are taking from their customers illegaly per month.