Incidental Credit Agreement | Explained By The Best Debt Counsellor In South Africa (Rated #1)
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Everything You Need to Know About an incidental credit agreement In South Africa.

By The National Debt Review Center

This blog post seeks answers to the commonly asked questions on incidental credit agreements in South Africa. How are these agreements classified in comparison with credit agreements? What is an individual’s responsibility when they have an accidental agreement? Do interest rates differ on these terms, and what obligations do holders have towards accidental contracts with individuals?

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Incidental Credit Agreement

What is an incidental credit agreement?

An incidental credit agreement is a credit agreement between a borrower and a lender that is not intended to be the primary source of financing for the borrower. The agreement typically provides for the lender to make advances to the borrower as needed, up to an agreed-upon limit, in order to cover unexpected or unplanned expenses.

The terms of the agreement may vary depending on the policies of the specific lender but will generally require that the borrower repay the advances within a certain time period and may include interest charges.

Incidental credit agreement example

It is not uncommon for businesses to extend credit to their customers, either through an informal arrangement or a more formal credit agreement. In South Africa, an incidental credit agreement is regulated by the National Credit Act (NCA), which came into effect on 1 June 2007.

An incidental credit agreement is any agreement between a debtor and creditor where the debtor agrees to pay the creditor, in installments or otherwise, for goods or services that have been delivered or provided by the creditor, and where the agreement does not provide for interest to be charged on the outstanding balance. The NCA defines an incidental credit agreement as an arrangement between a creditor and debtor whereby:

The provision of goods or services by the creditor is financed by the debtor;
The agreement does not make provision for any interest to be charged on the outstanding balance; and
The total amount payable by the debtor under the agreement (excluding any applicable VAT) does not exceed R8 000.

Incidental credit agreements are distinct from other types of credit agreements in South Africa in that they are subject to different rules and regulations. For example, while all other credit agreements must be in writing, an incidental credit agreement can be oral. In addition, while other types of credit agreements may only be entered into by natural persons (individuals), an incidental credit agreement can also be entered into by a juristic person (a company).

While an incidental credit agreement may seem like a less formal way of extending credit to a customer, it is important to remember that the NCA still applies. This means that businesses need to be aware of their obligations under the Act, which include provisions around responsible lending, marketing and advertising, and credit agreements.

How to get a credit agreement in South Africa

In order to get a credit agreement in South Africa, you will need to follow these steps:

  1. Find a reputable credit provider. There are many different credit providers in South Africa, so it is important to do your research in order to find one that suits your needs.
  2. Make sure that you are eligible for a credit agreement. Most credit providers have certain eligibility criteria that you will need to meet in order to be approved for a loan. Download the free My Credit Score App
  3. Fill out an application form. Once you have found a suitable credit provider, you will need to fill out an application form in order to apply for the loan.
  4. Wait for approval. Once your application has been submitted, it will be reviewed by the credit provider and you will be notified of their decision within a few days or weeks.
  5. sign the contract and begin making repayments. If your application is successful, you will be required to sign a contract with the credit provider outlining the terms of the loan agreement. You will then begin making repayments on the loan in accordance with the agreed upon schedule.

How to repay a credit agreement in South Africa

It is important to repay a credit agreement as soon as possible to avoid any late charges or penalties. There are a few ways to repay a credit agreement in South Africa.

One way to repay a credit agreement is by a setting up a debit order. This is usually done by the credit provider when finalizing the agreement.

Another option is through your online banking profile. This can be done by logging into your online banking account and selecting the option to make a payment. You will need the account number and reference for the credit agreement you are repaying.

You can also repay a credit agreement by making a payment over the phone. This can be done by calling the customer service number for the company you have the agreement with. They will likely require some information from you, such as your account number and the account reference number, before they process your payment.

Signs that you are getting into debt

  1. You’re using more and more of your credit card limit.

If you find yourself using a larger and larger portion of your credit card limit each month, it’s a sign that you’re getting into debt. This is because you’re likely only making the minimum payment on your credit card balance, which means that the interest charges are adding up and eating into your available funds.

  1. You’re only making the minimum payments on your debts.

Making only the minimum payments on your debts is a surefire way to get deeper into debt. This is because the minimum payments usually don’t cover the interest charges on your outstanding balances, so you’re essentially treading water financially.

  1. You’re using payday loans or other high-interest loans to make ends meet.

If you’re taking out payday loans or other high-interest loans to cover your living expenses, it’s a sign that you’re in financial trouble. This is because these types of loans typically have very high interest rates, which can quickly add up and leave you even further in debt.

  1. You’re constantly worried about money.

If you find yourself worrying about money all the time, it’s a sign that you’re struggling to make ends meet financially. This can be extremely stressful and can take a toll on your mental and physical health.

  1. You’re using your savings to pay for expenses.

If you’re dipping into your savings to cover your monthly expenses, it’s a sign that you’re in debt. This is because you’re likely not bringing in enough income to cover your costs, so you’re forced to rely on your savings to make ends meet.

If you’re experiencing any of these signs, it’s important to take action to get out of debt before it gets worse. There are many different options available to help you get back on track financially, so don’t be afraid to seek out help if you need it.

Use the below free calculator to evaluate the state of your indebtedness


In South Africa, accidental credit agreements are a type of loan that is typically used to cover unexpected expenses. These types of loans can be very helpful in a pinch, but it’s important to understand the terms and conditions before you agree to one. We hope this article has helped you learn everything you need to know about accidental credit agreements in South Africa so that you can make an informed decision if you ever find yourself in need of one.

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