Fees: A maximum tax imposed can be paid in advance or added to a consumer`s primary liability. “Unsecured credit transactions” are agreements for which there is no guarantee on debt (such as loans or loans). 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. The drastic reduction in interest rates conceals or conceals the actual cost of credit when initiation and service fees are added. These fees may remain largely hidden, with an emphasis on interest rates (better known to consumers) when products are marketed. Fees help keep interest rates low, which makes credit cheaper, although credit is not cheaper.
Abandoning the cost of credit away from interest and fees (which consumers do not know about) will increase the likelihood that consumers will be misled about the actual cost of credit. Many are attracted to borrow money that will cost much more than they originally anticipated. It is important that paralegales understand the risk that this concealment of the actual cost of credit will occur in order to warn their customers of this danger. In all credit contract proceedings, a court may declare that a credit contract is unwise, in which case the court can order credit providers can also charge an introductory fee to consumers. This is a levy charged to consumers for entering into credit contracts with credit providers. It also stressed that introductory fees should never exceed 15% of the main debt. The law contains only a relatively short list of offences that are the subject of criminal prosecution. On the other hand, the Usury Act provided that anyone who violated a provision of the law would commit a crime.
For example, it was an offence to collect interest higher than the Usury Act Maximum, which is no longer the case. 15. Following the conclusion of a loan agreement with consumers, the respondent did not pay the loan amounts on time, or not at all; recover monthly reimbursement amounts from consumers. Service charges are defined as a fee that can be charged by a credit provider at regular intervals (usually monthly) in relation to the routine administrative costs associated with maintaining a credit contract. The maximum service fee in the form of regulations is R50 per month or R600 per year. All categories and sizes of credit contracts are subject to the same maximum “flat rate” tax of R50. It appears that the service commission has been standardized to simplify the application of the law, which is justified by the fact that every loan, regardless of size, must be managed. 52. Section 170 of Regulation 55, paragraph 1, point b) (viii), provides that a lender must keep all applications for credit, credit contracts and credit amounts in the form and form prescribed for a specified period.
General condition 2 of the respondent`s registration conditions requires the respondent to conduct its business in a manner consistent with the purpose and requirements of the law. A student loan could, for example, be granted to an unemployed consumer who may not have a credit file (so that the lender does not know its payment history). The consumer may not be solvent and there is no security. The nature of these agreements excludes reckless loans.