A consumer is over-indebted when available information indicates that the consumer is unable to pay in a timely manner the amounts due under a credit contract. In deciding whether or not a consumer is over-indebted, a court must take into account the fact that the lender does not recover the money or property sold, and the court has no discretion to order it. This is a drastic remedy and an abandonment of the common law. It was not available from unregistered microcredits and is an important new remedy that is readily available to consumers. If a consumer is late, the credit provider must inform the consumer in writing of its failure. It is in fact a letter of claim. However, the communication must do more: the credit provider must propose to the consumer that the consumer pass on the credit contract, among other things, to a debt advisor in order to resolve the dispute or to agree on a plan to update the payments. Our unique table at the beginning of the agreement allows you to tailor the credit contract to your needs “unsecured credit transactions” are agreements for which there is no guarantee for debt (such as loans or sales on credit). The amount or time to repay is unlimited. Unsecured agreements over R8,000 and/or repayable agreements of more than six months fall into this category.
The maximum interest rate is linked to the South African Reserve Bank `SARB` redemption rate ((return rate x 2.2-20% per annum) and is currently 39.8% per annum (based on the current rest of 9%). This maximum rate is almost twice the maximum allowed under the Usury Act, which applied until May 31, 2007 (20% per year). Furniture sales, for example, could now cost twice as much. A credit contract is a credit contract if it provides for a deferral or delay in payment and when a commission or interest is charged for the deferred payment. The law does not require a credit contract to be signed in writing and by both parties, even though this is implicit in the law as a whole. A credit contract can be a credit facility, a credit transaction or a credit guarantee (or a combination of these). These three terms are defined in section 8 of the act. If a court declares that a given credit contract is unwise, it must also decide whether or not the consumer is over-indebted at the time of the legal proceedings. All consumer debts must be taken into account. If the court finds that the consumer is over-indebted, he can make an order Use this agreement if you need to register the loan, but if you have a high level of trust with the borrower. In particular, the microcredit sector was born and increased due to exorbitant interest rates and many microcredits will find it difficult to stay in business with the new limits. It is therefore highly likely that most lenders will calculate interest rates and maximum fees in order to keep their profits as high as possible.