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Expressed Debt Review Phrases: Loan Providers
When people talk about a “loan provider” they may automatically think of one Bank. For example, ABSA is a loan provider African bank is a loan provider Capitec is a loan provider. This is true. Banks offer credit to people (they grant credit). Of all lenders, it is banks that offer the most loans to people. However, there are other lenders than just the banks.
“If a person or company allows you to repay a debt over time and charges you a fee for doing it, then they are a lender.”
If a person or company allows you to repay a debt over time and charges you a fee for doing it, they are a loan provider. They give you credit.
The fee collection aspect is important and it is this feature that sets a loan provider apart. In general, lending providers charge two or three types of fees:
An entry fee
A monthly account fee
Interest on the amount you borrow
This means when you’ve bought something and can repay it later without any of the above (no interest, no entry fee, no monthly account fee) then you are Not Dealing with a Lender.
If your dad gives you R100 and says, “Pay me back whenever,” then he’s not a lender, he’s just a cool dad. This is because he doesn’t expect you to pay him back more than you borrowed and he hasn’t told you when and how to pay back the money.
However, if you borrow money from the lady on the street and she says you have to pay her an extra R100 back every week until you pay off the loan, she is a lender. She charges interest on the loan.
There are limits to what loan providers can charge for different types of loans. You cannot make up your own mind, but must adhere to the limits of the National Credit Act (NCA). If they charge more than this very specifically Limits, then they can be arrested or fined.
In addition, credit providers are not allowed to take away things like your bank card, ID card, SASSA card or the like. This is also illegal. If a loan provider asks about these things, you should report them to the NCR or SAPS.
Loan providers need to register
The law requires anyone who issues a loan and charges fees or interest on the loan to register with the National Credit Regulator (NCR). The NCR will then send them a sticker to put on the door and ask them to send them regular statistics.
Anyone or company that does not register with the NCR to offer credit is breaking the law and can be arrested and fined. This is often the case with loan sharks. You can be reported to the National Credit Regulator and the SAPS. Every year, NCR and SAPS raid the offices of many illegal lenders who violate the law.
Beware of illegal lenders. They don’t obey the law and will take advantage of you. ‘
A great way to tell if you are dealing with a legitimate lender is to have them have an NCR sticker on their door asking you for detailed information about your income and expenses, as well as other debts (and evidence) and a credit report about your financial situation. If they ask for your ID or debit card, they are illegitimate and should be reported.
Beware of illegal lenders. They don’t obey the law and they will take advantage of you.
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