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In June 2007, The National Credit Act came into practice to regulate financiers’ granting of credit. The Act seeks to regulate credit to make it accessible, fair as well as transparent, without allowing consumers to put themselves into too much debt.

This means that financiers are required to run a vigorous check to determine whether or not you are capable of paying off the loan. If you are not and a credit provider grants the credit anyway, a court can deem the granting of the credit reckless.

It also ensures that you receive a written quotation detailing the costs involved before you sign the agreement. This agreement is now also regulated by the Act and prevents credit providers from limiting your rights through underhanded clauses.

Your rights
The Act governs all types of credit and loan agreement and affords you more rights than you previously had. Your right to apply for credit and be protected against discrimination in being granted credit is regulated by the Act. You need to be informed as to why credit was not granted should you ask.

The new Act also stipulates that the agreement between you and the financier is written in plain and simple language that is easy to understand. This protects you from hidden costs and clauses and rising interest rates which are detailed in the agreement.

After the National Credit Act came into operation, the National Credit Regulator (NCR) instituted the provision of debt counseling as a means to escape debt for those unable to meet their agreements. The Act affords you the right to a debt counselor.

The legislation though, should protect you from ever needing a counselor.