How does a credit agreement affect you? And who regulates these transactions?
Whether purchasing furniture for your house, buying clothing on your store card or being granted a loan for your new car, people are entering into credit agreements daily. Many enter into these agreements without fully understanding the legal implications of such an agreement. It is therefore important to have a proper understanding of what is a credit agreement is and the legal consequences arising from such agreement. Credit agreements are contracts or as the name suggests, agreements in terms of which payments or repayments from one party to another are carried forward, or held over. These contracts are regulated by the National Credit Act which came into effect in 2005. This Act protects your right as a consumer, by regulating the granting of loans or credit. It places the onus of lending/borrowing on both you, and your credit provider. Know your rights as a consumer and credit provider!
Why does the purchasing of furniture or lending of money for a deposit on your new house need to be regulated by an Act? The purpose of the National Credit Act is to promote the social and economic welfare of all South Africans, and to promote a fair, efficient, effective and transparent credit industry, which ultimately protects you, the consumer.
You will know if you have entered into a credit agreement if the contract:
- is a credit facility
- is a credit transaction
- is a credit guarantee
If you are sued, or want to sue for payment that is owed to you, our tenacious and experienced litigation professionals will advise you on your rights, and the remedies available to you to ensure a successful outcome.