National Credit Act Information
With effect from the 1st June 2007, a new credit act was implemented by the Department of Trade and Industry that created a credit industry which is more responsible, through protecting the rights of the consumer.
SA Home Loans has always been a firm believer in protection of consumer rights throughout the mortgage bond transaction process. Ensuring that we are compliant with the legislation has not required a major shift in the manner in which SA Home Loans has always conducted their home loan business.
Here are some frequently asked questions about the National Credit Act and how it might apply to you:
What is the National Credit Act?
The National Credit Act was passed into law by Parliament and signed by the President in March 2006 and became enforceable in July 2007. The Act aims to protect consumers taking credit or entering into consumer credit transactions.
In addition, The Act makes provision for the control and regulation of all credit transactions, including mortgages, credit cards, overdrafts, micro-loans and pawn broking transactions.
The Act also regulates all institutions that provide consumer credit, including banks, furniture companies, clothing and other retailers, micro-lenders and pawnbrokers.
Provision is made in the Act for the registration of debt counselors and debt restructuring for over-indebted consumers.
The Act also regulates credit bureaux and consumer credit information, providing for free access to this information, kept by credit bureaux, and for a process by which any errors on the credit records can be corrected.
For more details read the National Credit Act.
Does the National Credit Act apply to me?
The National Credit Act applies to credit agreements with all consumers, and to entities such as closed corporations, companies, partnerships and trusts, whose asset value or annual turnover is below a prescribed threshold (currently R1 million).
How does the National Credit Act affect me?
You may be required to provide additional information when applying for credit in order for an affordability assessment to be performed.
You’ll find that documentation affecting the granting of credit or extension of credit is written in plain language and that a clear breakdown of costs is provided.
Your credit provider is required to make sure that you understand the risks, obligations and costs associated with your credit application.
Will there be any changes to processes and forms when applying for credit?
We will require additional information when assessing your application loans including details of all your income and expenditure in order to perform an affordability assessment. If you are married in community of property you will require the written consent of your spouse before you can apply for a loan.