National Credit Act, 2005 (Act No. 34 of 2005)

Regulations

National Credit Regulations, 2006

Chapter 5 : Interest and Fees

Part C : Interest applicable to different products

42. Maximum prescribed interest and initiation fees
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(1)The following maximum rates of interest will apply:

 

Table A : Maximum Prescribed Interest Rates

Credit type

Maximum Prescribed Interest Rate
1.Mortgage agreements

RR + 12% per year
2.Credit facilities

RR + 14% per year
3.Unsecured credit transactions

RR + 21% per year
4.Developmental credit agreements

RR + 27% per year

4.1Small business

4.2Low income housing (unsecured)
5.Short-term transactions

5% per month on the first loan and 3% per month on subsequent loans within a calender year
6.Other credit agreements

RR + 17% per year
7.Incidental credit agreements

2% per month

[Regulation 42(2), Table A, amended by regulation 2 of Notice No. 1080, GG 39379, dated 6 November 2015]

 

Where :

(a)RR indicates the reference rate, being the ruling SA Reserve Bank Repurchase Rate,
(b)The intrest rate on short term credit transactions and incidental credit agreements must be disclosed as a monthly interest rate, in such disclosure as is required by the Act and these regulations.

 

(2)The following maximum limits will apply to initiation fees:

 

Table B : Maximum Initiation Fee

Sub-sector

Maximum Initiation Fee

Mortgage agreements

(a)

R1 100 per credit agreement, plus, 10% of the amount of the agreement in excess of R10 000

(b)

But never to exceed R5 250.

Credit facilities

(a)

R165 per credit agreement, plus, 10% of the amount in excess of R1 050

(b)

But never to exceed R1 050.

Unsecured credit transaction

(a)

R165 per credit agreement, plus 10% of the amount in excess of R1 000

(b)

But never to exceed R1 050

Developmental agreements

For the development of a small business

(a)

R275 per credit agreement, plus 10% of the amount in excess of R1 000

(b)

But never to exceed R2 600.

For low income housing (unsecured)

(a)

R550 per credit agreement, plus 10% of the amount in excess of R1 000

(b)

But never to exceed R2 600

Short term credit transactions

(a)

R165 per credit agreement, plus 10% of the amount in excess of R1 000

(b)

But never to exceed R1 050

Other credit agreements

(a)

R165 per credit agreement, plus 10% of the amount in excess of R1 000

(b)

But never to exceed R1 050

Incidental credit agreements

Nil

[Regulation 42(2), Table B, amended by regulation 3 of Notice No. 1080, GG 39379, dated 6 November 2015]

 

Where :

(a)The amount of the agreement is the amount deferred in terms of the agreement.