Home
/
Our Insights
/
Article Detail
/
Home
/
Home
|
Login
Our Team
Our Expertise
Our Insights
BOND CALCULATOR
SUBSCRIBE
Our Team
Our Expertise
Our Insights
You can share this article in the following networks2:
Be wary of an ‘instant loan’
15 September 2022
652
“Open any newspaper, check your junkmail or read one of the many unsolicited sms or WhatsApp messages and you will find an advertisement from a credit provider offering an instant credit loan, some even going so far as to state you are immediately approved. But how legit are these solicitations?”
Many consumers are in need of a quick financial injection and the lure of these unsolicited requests to get a quick and ‘hassle free’ loan without lots of paperwork can seem quite appealing. Generally though, caution should be your first instinct as these solicitations are aimed at luring consumers into loan transactions that are not necessarily aligned with the requirements of the National Credit Act (NCA).
The NCA was enacted to protect consumers from reckless credit provision and over-indebtedness. As such it places a mandatory obligation on all credit providers to investigate the credit worthiness of a consumer before approving a loan to them. Should it then transpire that a consumer is not able to afford the loan and the provider continues to provide credit, this will amount to reckless lending in terms of the NCA.
So, when a credit provider makes the promise of an instantly approved loan, this flies in the face of the NCA requirements. Often these loans provide the promise of award without the need for a credit application and credit assessment. Additionally, loan terms can be aggressive and have sky-high interest rates and other unfavourable conditions not in compliance with the requirements of the NCA.
Without going into too much detail, it suffices to provide a general warning to consumers to be careful when considering such loans. Take into account the reputation of the proposed provider, the channel through which the solicitation came, statements regarding pre-approval etc. If it sounds too good to be true, it may just be! Do your homework, read the fine-print and don’t sign or commit to anything if you are not comfortable. And if you have signed up for such a loan in the past, consider letting your attorney review the terms for you to see whether these comply with the requirements of the NCA.
Disclaimer: This article is the personal opinion/view of the author(s) and is not necessarily that of the firm. The content is provided for information only and should not be seen as an exact or complete exposition of the law. Accordingly, no reliance should be placed on the content for any reason whatsoever and no action should be taken on the basis thereof unless its application and accuracy has been confirmed by a legal advisor. The firm and author(s) cannot be held liable for any prejudice or damage resulting from action taken on the basis of this content without further written confirmation by the author(s).
Previous
Employed learnerships - a silver bullet for your skills development spend!
Next
Can you claim maintenance for your adult children?
Related Expertise:
Banking and Finance
,
Consumer Law
Tags:
Credit
,
Credit Act
,
Loan
,
National Credit Act
Share:
Talk to us
Get in touch with us to discuss how we can help you with your Banking and Finance challenges
Get in touch
Popular Insights
Unlawful Arrests and your rights
Understanding Restraints of Trade in South Africa: Legal Position and Practical Insights
Mediation v Arbitration: What Is the Difference? PART 2
What Can You Do When Your School Is Being Neglected by the Government?
Related Insights
Don’t lose your title deed!
When should you register your B-BBEE transaction with the B-BBEE Commission?
Health and safety and the employer
Recent Insights
Don’t lose your title deed!
When should you register your B-BBEE transaction with the B-BBEE Commission?
Health and safety and the employer
You can share this article in the following networks:
Offices
+27 21 840 8000
law@mblh.co.za
Facebook
Back to top