In the form of secured loans, money is paid and the lender receives a commitment for personal property or something of value as collateral for the repayment of the loan. The rental of personal property – that is, no land or dwelling – would include, for example, a fax machine or a motor vehicle, with rent in increments, fees and interest. (If interest and fees are not collected, it is not a credit transaction within the meaning of the law).) The total slices generally amount to the value of the article let. Once all payments are paid, the property is transferred to the consumer. This goes against the general right to rent. However, if the agreement provides that the property remains in the hands of the owner, it is still a credit transaction within the meaning of the law. Service charges are defined as a fee that can be charged by a credit provider at regular intervals (usually monthly) in relation to the routine administrative costs associated with maintaining a credit contract. The maximum service fee in the form of regulations is R50 per month or R600 per year. All categories and sizes of credit contracts are subject to the same maximum “flat rate” tax of R50. It appears that the service commission has been standardized to simplify the application of the law, which is justified by the fact that every loan, regardless of size, must be managed.
A credit provider must not use an identity card, credit or debit card, access card or PIN to obtain a credit agreement or to recover the contract. A violation of this provision is punishable. A much larger number of applications for default judgments on credit contracts must now be referred to a judge instead of being dealt with by the court administrator. This will significantly increase the workload of judges and could result in much longer debt enforcement procedures, which could lead to frustration among credit providers. In certain circumstances, consumers may terminate contracts (in writing and duly provided) within five business days of signing. This cooling fee applies only to leases and temperance contracts in a location other than the lender`s registered premises. As a general rule, this right applies to increments (such as cars, books, household appliances) made at the consumer`s home or workplace.