Any documents where no form is prescribed must be in plain language language which an ordinary consumer with average literacy skills and minimal credit experience will understand. When a mortgage bond is cancelled, the consumer will be liable for bond cancellation costs.
Also, if a consumer is in default under a credit agreement, and the credit provider has already commenced debt-enforcement proceedings, that agreement may not be subject to the debt review.
The Act contains a lengthy list of reasons for disqualification as a debt counsellor. Consumers may prepay any amount due under a credit agreement e. Unsecured money loans[ edit ] Unsecured money loans are usually smaller money loans micro-loans re-payable in instalments, where the lender is given no security for re-payment of the debt.
The consumer is over-indebted. The Act provides rules of practice, procedure, evidence and a list of possible orders in relation to the Tribunal. After that it will cost R20 per enquiry.
A negative result for consumers, however, could be that credit grantors will be much more reluctant to grant credit in the future, and that, therefore, fewer people will be able to access credit. This is usually the result of economic desperation and lack of understanding of the difficulties of repaying or servicing their debt.
A consumer may apply in person to a debt counsellor to be declared over-indebted although this is not permitted if the credit provider has already taken steps to recover the debt. If you pay for the goods in instalments, but are not allowed to take the goods until the final payment then this is also a form of credit agreement.
Statements of account[ edit ] The Act contains detailed provisions regarding statements of account. The initiation fee[ edit ] The initiation fee is intended to cover the costs of initiating a credit agreement, although it is not clear exactly what costs the fee is intended to cover.
Early settlement and repayments[ edit ] Consumers are entitled to settle their debts in advance at any time, with or without advance notice, after requesting a statement from the credit provider of the amount required to settle the account.
It is therefore very likely that most lenders will charge the maximum rates of interest and fees to keep their profits as high as possible. Levenstein summarises this state of affairs: The cost of credit[ edit ] It is critical that one understand the full implications of the new cost-of-credit provisions in the National Credit Act and Regulations.
The credit provider must notify the consumer within ten days of the estimated value of the goods. Credit providers are, however, often to blame for recklessly giving too much credit to consumers who cannot afford to service their debt.
Mortgage agreements[ edit ] Mortgage agreements are money loans secured by the registration of a mortgage bond over land, the proceeds of which are usually used to buy land or housing.
Taking on extra loans in order to pay back existing loans can lead people into a debt spiral out of which it may be difficult to escape.
The Tribunal may award the consumer an additional amount if this is deemed necessary.
Regulatory agencies also protect lendersby requiring that approved formats that help set standards for the consideration of credit. Customers can apply for credit cardspersonal loans, mortgage loans and revolving credit accounts.
There are countless credit card types, and various forms of charge cards, store cards, rewards cards and balance transfer cards available. The Act allows these courts to be used in various circumstances. This register will be accessible to any person on application in the prescribed form.
Consumer[ edit ] A consumer is the party to whom goods or services are sold, or to whom money is loaned in any of the examples referred to above. Secured loans[ edit ] In terms of secured loans, money is paid, and the credit provider receives a pledge of any movable property or something else of value as security for repayment of the loan.
The overriding theme of the Act is consumer protection. Low-income individuals and communities who borrow small amounts are therefore likely to continue to suffer the same devastating socio-economic hardships referred to above, contributing to the perpetuation of poverty.
This register will be accessible to any person on application in the prescribed form. The consumer becomes owner only once all instalments have been paid. The positive impact of capped interest rates, furthermore, is negated by the high maximum initiation and service fees.
Reckless credit[ edit ] A credit provider must not enter into a reckless credit agreement with a consumer. While this process is under way, a consumer may not use his credit facility for example, his credit card ; nor may he enter into another credit agreement.If you have a credit card, charge card, cheque, coupon, voucher, etc., these are all types of credit agreements.
If you buy goods which you take away with you, but pay the price in instalments this will also be a form of credit agreement. Credit agreements in South Africa are agreements or contracts in South Africa in terms of which payment or repayment by one party (the debtor) to another (the creditor) is deferred.
This entry discusses the core elements of credit agreements as defined in the National Credit Act, and the consequences of concluding a credit agreement in South Africa. • The basic difference between contract and agreement is that the remedies for breach of contract and breach of an agreement are way too different.
• Contract becomes enforceable once three conditions of legally binding agreement are met while agreement can be worked upon when two minds meet at. Types of Consumer Credit & Loans. Loan contracts come in all kinds of forms and with varied terms, ranging from simple promissory notes between friends and family members to more complex loans like mortgage, auto, payday and student loans.
Retail customer credit agreements will vary by the type of credit being issued to the customer. Customers can apply for credit cards, personal loans, mortgage loans and revolving credit accounts. Each type of credit product has its own industry credit agreement standards.
Legal Rules On Consumer Credit Agreements And Agency P2 Be able to apply the legal rules on consumer credit agreements and agency P Differentiate between types of credit agreements which Claire could use to obtain the new car.Download