The National Credit Act has made great strides in consumer protection and the new interest rate limits will provide welcome relief to many borrowers. However, the combined effect of interest, introductory fees and service charges will result in the cost of credit for small credits remaining exorbitant. This will have devastating adverse effects on the poorest people and communities. The consumer has an obligation to inform the credit provider of one of the following changes: Obviously, the most important section you need to check out is the second. Sometimes mistakes can be made when your credit history is compiled. For example, if your medical administrator mistakenly reported that you did not pay your deductible. Correcting these types of errors requires a lot of effort on your part. You should first contact your creditor and then your creditor`s agencies. As a last resort, you can contact the Consumer Financial Protection Bureau at any time if you feel that other ways to correct errors in your credit report are not responsive. Therefore, credit cannot be considered a basic universal service, to which access to water, health care and electricity should be expanded, as well as access to water, health care and electricity.

There is a greater need to reconcile access to credit with the protection of consumers, especially vulnerable people. If a consumer is late, the credit provider must inform the consumer in writing of its failure. It is in fact a letter of claim. However, the communication must do more: the credit provider must propose to the consumer that the consumer pass on the credit contract, among other things, to a debt advisor in order to resolve the dispute or to agree on a plan to update the payments. Until June 1, 2007, the Usury Act (now repealed by the National Credit Act) limited the interest rates that credit providers could charge. Until that date, the maximum interest rate was 20 percent per annum for all credit contracts up to r10,000 and seventeen percent per annum for credit contracts over R10,000. However, registered microcredits were excluded from the Usury Act from 1992, meaning that they were allowed to calculate all the interest rates they liked. This has led to exorbitant interest rates, where microcredits typically calculate 30% per month (or 360% per year), or 18 times more than 20% per year for other loans.

Due to the huge profits made by microcredits, the sector has become uncontrollable and has grown rapidly compared to the previous year. In the three years from September 2003 to August 2006, for example, industry payments more than doubled. The sector has grown by more than 30% per year on average. In the twelve months to August 2006, the total marginal value of loans paid in the microfinance sector recorded exceeded R30,000,000 R30,000. From the above, it is clear that any credit provider that offers a fee, fee or interest on a depending account offers ancillary credits, including a credit provider, that provides its consumers with so-called “anticipated” discounts. Different categories of credit contracts are subject to different interest rates: if you want to terminate the contract, you must pay the financial company the money you still owe to the car within 30 days. Section 89 lists a number of illegal credit contracts, including if the proceeds of the sale are not sufficient to settle the account, the creditor can go to court to recover the remaining balance owed.

Sumit ThakurThe National Credit Act has made great strides in consumer protection and the new interest rate limits will provide welcome relief to many borrowers. However, the combined effect of interest, introductory fees and service charges will result in the cost of credit for small credits remaining exorbitant. This will...Seminar Topics