Your rights as a borrower in South Africa

The National Credit Act protects SA borrowers. Learn about fee caps, the pre-agreement quote, reckless lending and how to complain to the NCR.

• Only NCR-registered credit providers may lend to you.
• You must get a pre-agreement statement and quotation before signing.
• Lending you money you clearly can't afford is reckless lending, and a court can set the agreement aside.

Check the lender is registered

Every credit provider in South Africa must be registered with the National Credit Regulator (NCR) and display its NCRCP registration number. You can check a number on the NCR website. If a 'lender' has no number, don't deal with them.

The pre-agreement quote

Before you sign, the lender must give you a pre-agreement statement and quotation in plain language, in an official language you understand. It lists the principal debt, interest rate, initiation fee, monthly service fee, credit life insurance and total cost. The quote is binding for 5 business days.

Fee and interest caps

The National Credit Regulations cap what lenders may charge. The limits depend on the type of credit:

• Unsecured credit: interest up to the repo rate plus 21% a year.
• Short-term credit (up to R8,000 for up to 6 months): up to 5% a month on a first loan.
• Initiation fee: R165 plus 10% of the amount above R1,000, up to a maximum of R1,050 for most credit.
• Monthly service fee: up to R60.

Affordability and reckless lending

Lenders must assess whether you can afford the repayments, using proof of income and your expenses. If a lender gives you credit without doing this, or despite clear evidence that you can't afford it, that is reckless lending. A court or tribunal can suspend or cancel the agreement.

Things lenders may not do

• Keep your bank card, PIN, ID document or SASSA card.
• Charge an upfront fee before paying out the loan.
• Add credit life cover you didn't agree to, or stop you choosing your own insurer.
• Harass you at unreasonable hours to collect a debt.

How to complain

First complain to the lender in writing. If that doesn't resolve it, you can escalate to the Credit Ombud or lodge a complaint with the National Credit Regulator (call centre 0860 627 627).

Can I cancel a loan after signing?

For agreements signed away from the lender's premises there is a 5-business-day cooling-off period. You can also settle any credit agreement early by paying the settlement amount.