January 2018

As we start the year, unfortunately the festive season left some consumers in a desperate situation when it comes to finances. There are many reasons why consumers need to borrow money at this time of the year, says Nomsa Motshegare, CEO at the National Credit Regulator (NCR).

“Regardless of the reason for borrowing, before consumers sign credit agreements, they need to understand the cost of credit and the terms and conditions of different credit agreements,” says Motshegare. The credit provider must give consumers a pre-agreement statement and quotation when seeking credit. These will outline the terms and conditions of the proposed agreement and all costs involved such as cost of credit, interest, service fees, initiation fees, credit insurance if there is any, deposit required if there is, number of instalments, date of first instalment, date of last instalment etc.

According to the National Credit Act (NCA), before credit providers extend credit to consumers, they are required to conduct an affordability assessment to assess the consumer’s general understanding and appreciation of the risks and costs of the proposed credit; the rights and obligations of a consumer under the credit agreement; debt repayment history as a consumer under credit agreements and the consumer’s existing financial means, prospects and obligations.

Consumers need to be truthful and honest when providing information at the point of application. This includes providing the correct amount for household expenses and not decreasing the amount in order to qualify for credit. By being truthful, consumers will be protected by the National Credit Act, but will lose the protection of the NCA if they give false information.

Consumers should enquire what interest rates they will be charged including all other charges that will be added before signing the credit agreement.  For example, when taking out an unsecured credit which consists mainly of personal loans, the credit provider can charge maximum interest of up to 27.75%. “However, as a consumer you can negotiate the interest when you get the pre-agreement statement and quotation. You can use these to shop around for better deals. Consumers are reminded to only borrow from a registered credit provider”, advises Motshegare

Tips for borrowing wisely:


Issued by:

Lebogang Selibi
National Credit Regulator
Tel: (011) 554 - 2722
NCR Call Centre: 0860 627 627
Switchboard: (011)554-2700
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.