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

Regulations

National Credit Regulations, 2006

Chapter 5 : Interest and Fees

Part B : General Stipulations

40. Interest calculation
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(1)Interest may be calculated daily and may be added to the deferred amount monthly, at the end of the month, or
(a)if interest is added to the deferred amount at an earlier day than the last day of the month,
(i)this earlier day may not be earlier than the date upon which the repayment is due as per the agreement; and
(ii)the rand amount of interest for the month must be calculated from the previous date when interest was added to the deferred amount, until this earlier day, and
(iii)interest may not be added to the deferred amount more than once in every month,
(b)interest may be added to the deferred amount periodically as defined in the credit agreement, provided that such periods are no shorter than the number of days in the month during which such interest is added, or
(c)in the final month of a credit agreement, interest due may be added to the deferred amount on the final day of the agreement.

 

(2)The rand amount of interest for any particular day as referred to in (1),
(a)must be calculated as follows for any credit agreement other than short term credit transactions:

(b)must be calculated as follows for short term credit transactions:

(c)Where:
(i)the deferred amount for the day must be calculated as the average deferred amount for the day, or as the deferred amount at a particular time in the day, as defined per the credit agreement;
(ii)the interest rate must not exceed the maximum prescribed interest rate applicable to the category of credit agreement concerned;
(iii)number of days in the year may be interpreted as either 365, or as the actual number of days in the particular year;
(iv)For short term loans, the number of days in the month may be interpreted as either 30, or as the actual number of days in the particular month.

 

(3)The rand amount of interest for any particular month must be calculated by adding the rand amounts of interest for all the days in that month.

 

(4)The manner of calculation employed by any particular credit provider may differ from the manner prescribed above, provided that the amount calculated by the institution for any year may not differ by more than 0.1% from the amount that would have resulted if calculated as prescribed in this section.