Loan Contracts and Consumers Rights

By Courtney Maderra, Financial Consulant at Debt-Savvy

Hi, my name is Courtney a Financial Consultant at Debt-Savvy, and today I am going to teach you about loan contracts and your consumer rights.

These are a few basic points that an individual should be mindful of when applying for credit:

1. As per the national credit act, you have the right to apply for credit from any credit provider. The right however does not prevent the credit provider from refusing to grant the credit provided this is done on reasonable grounds.

2. The right not to be discriminated against when applying for credit: Consumers who are applying for credit are further protected against unfair discrimination by a credit provider. The Act forbids credit providers from discriminating against consumers on the basis of colour, race, age, political affiliation, sexual orientation, religious belief, or affiliation to any particular trade union. A consumer who is of the opinion that he/she has been discriminated against for these reasons may act against the credit provider through the Equality Court, or may complain to the National Credit Regulator which will refer the matter to the Equality Court.

3. The right to be given reasons for credit being declined, in my experience as a debt counselour consunmers are often unaware as to why they were denied credit. Its critical that one understands as to why they were denied so that one can resolve the issue and persue their initial aims and goals.

4.The National Credit Act gives a consumer, whose credit application has been declined by a credit provider, the right to request written reasons explaining why his/her application for credit has been declined. If the decision to decline the consumer's request is based on an unfavourable report received from a credit bureau, the Act stipulates that the credit provider must supply the consumer in writing with the name, address and other contact details of the credit bureau from which the credit provider received the information. This is as per section 62 of the National credit act.

5.The right to be given documents in an official language that the consumer understands. A consumer has the right to receive documents from a credit provider in an official language that he/she understands. Documents that a credit provider must give to a consumer include the credit agreement, quotations and statements. Most credit providers provide all their Contracts in English, Afrikaans, isiZulu and isiSotho.

6. The right to be given documents in plain and understandable language. A consumer has the right to receive information and documents in plain language. This means that the contents, meaning and importance of the document must be easy to understand.

7. The right to be given documents related to the credit transaction The Act gives the consumer the right to receive documents relating to the credit agreement in a manner that the consumer chooses. A consumer may choose to receive documents either in person at the credit provider's place of business, email.

8. The right to confidential treatment The consumer's right to confidentiality is protected by the provision that any person or organisation that receives or compiles confidential information on a consumer must use the information for the sole purpose for which the consumer has given his/her consent.

9. The right to access your credit report .The Act gives the consumer the right to. Access information that a credit bureau has in relation to him/her. The information must be given to the consumer free of charge every twelve months.

10. Challenge and request proof of the accuracy of information held by a credit bureau. Should a credit bureau fail to provide the consumer with proof of accuracy of information that the consumer disputes, it is compelled to remove the disputed information from its records.

11. The right to receive periodic statements The Act stipulates that a credit provider must provide a consumer with a statement once a month or once every two months if the agreement is an instalment sale agreement, lease or secured loan. A long interval may be allowed with the consent of the consumer. This interval may, however, not exceed 3 months. With regards to a mortgage agreement the consumer is entitled to receive a statement every six months.


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