When you take out a loan in South Africa, you enter into a credit agreement governed by the National Credit Act. Key aspects include:
• Affordability assessment – Creditors must check you can afford the loan
• Interest rates – Both fixed and variable rates are regulated
• Fees – Initiation and service fees are capped by legislation
• Your rights – You can cancel within 5 business days (cooling-off period)
• Default consequences – Missed payments can lead to legal action and asset repossession
Understanding these aspects helps you recognise when debt counselling might be necessary and how the restructuring process works.