The National Credit Act was introduced as a means to help curtail reckless lending. The Act
came into effect in June 2007. Before 2007, it was relatively easy to borrow money, or apply
for hire-purchase, regardless of whether your affordability was such that you could in fact
pay back the loan or the repayments on the new appliance. The Act’s main purpose is
address the problems that the credit industry, as well as those who apply for credit, faced in
the past.

What does the National Credit Act do?

It helps you, the consumer, from getting into too much debt. This is done by making sure
that you can afford the repayments before you get credit (the loan or the hire purchase
agreement, for example) It does this by ensuring you can afford the repayments before you
get credit. Nowadays it is more difficult to get a loan than before 2007. The NCA makes the
process of applying for credit stricter. Now, when you apply for a loan, you need to supply
more documentation to provide that you can actually afford the repayments. The paper
needs to show evidence of your money coming in as well as the money going out, as well as
any existing credit agreements. The reason for this is so that you don’t incur debt that you
cannot afford to repay.

Some other benefits:

The Act stipulates that you can pay back credit agreement early and not face a penalty
charge. It’s the NCR’s role to make sure lenders stick to the rules of the Act. The NCA also
has a number of Consumer rights, and these are protected by the Act. The consumer rights
include:
 To apply for credit
 To be protected against discrimination in the granting of credit
 To be informed why credit has not been granted, should you ask
 To receive a free copy of your credit agreement
 To receive a credit agreement in plain and simple language
 To have your personal and financial information treated confidential

 To understand all fees, costs, interest rates, the total instalment and any other
details
 To say no to increases on your credit limit
 To decide whether or not you want to be informed about products or services via
telephone, SMS, mail or e-mail campaigns
 To apply for debt counselling should you be overwhelmed by debt
To learn more about the role of the NCS, speak to a friendly consultant at One Debt today.