An “acceleration clause” in a loan agreement (where the loan is repayable in instalments) provides that if the borrower fails to pay any one instalment, the full amount of the loan becomes due and is immediately recoverable in full by the creditor
An important part of South Africa’s economic growth is consumers’ trust in their preferred product or service providers. They have the right to be offered quality service or products. And should not be exploited to let their hard-earned money go to waste. Customers should, therefore, be protected and valued at all times.
As it is World Consumer Rights Day (on the 15th of March 2017), DebtSafe considers it a priority to share some valuable information to make you aware of certain rights.
According to the National Credit Regulator (NCR), consumers have rights in terms of the National Credit Act (NCA) to:
• Apply for credit.
• Know why credit was declined.
• Receive information and documentation in their preferred official language.
• Receive information and documentation in simple and clear language.
• Get documentation in their preferred delivery manner.
• Receive statements without charge.
• Receive their free credit report once a year from a registered Credit Bureau, and if evidence is available, question/dispute incorrect information.
• Apply for debt review/management/counselling.
When applying for credit, it is important to shop around for the best terms and rates available that will suit your budget. You should receive a quotation before any credit agreement is accepted. And the quotation received, should clearly disclose the fees and instalments involved. Here are a few examples that you need to be aware of when applying for certain credit:
Buying a Vehicle
Mrs. X wants to buy a car and applies for credit. Unfortunately, her application for credit has been declined. She has the right to inquire why her application has not been accepted and is informed via the credit provider that her credit profile is in a bad state. She disagrees with the given feedback because she knows she is in a position to get financing for a car. Mrs. X’s dispute (together with evidence provided) has been logged at the credit bureau and within 20 days receives feedback that the mistake on her profile has been corrected. She can now apply for credit again.
Taking out a Personal Loan
Mr. Y has the right to ask for a quotation when applying for a personal loan. The credit provider has to disclose all the fees, instalments and necessary terms involved. Mr. Y, therefore, needs to ask for the credit agreement (free of charge) to also see what the credit life instalment entails, for example. He has the right to take a look at the credit life premium and can also decide to choose his own credit life insurance provider. Finsafe is such an option for example.
World Consumer Rights Day is here and it’s time to get to know your rights as a consumer, so take some time to go through the credit act, the credit amendment act as well as the regulations to sharpen your knowledge.