1. Where do I register to become a MFSA member?
Contact: Leonie van Pletzen: Operations Manager: 012 346 1081 /firstname.lastname@example.org
2. An unsecured loan was granted to a consumer before 2007, when the National Credit Act was enacted. The Consumer has not repaid the loan in full but has paid small amounts of R50 per month, however the loan has not been settled.
a. What is the interest the credit provider can ask on that loan and when will that loan interest and fees reach their 'ceiling'?
The interest applicable on this loan will be as agreed in terms of the Usury Act, which was the legislation that regulated interest and pricing prior to the enactment of the NCA in 2007. The actual rate will depend on the capital disbursed originally. This was last set at 20% per annum for loans below R10000 and 17% per annum for loans above R10000.
b. What is the interest the debt collector/lawyer can ask on that loan and when will that interest and fees reach their 'ceiling'?
The debt collector/lawyer can ask the contractually agreed interest rate or the mora interest rate as per the Prescribed Rate of Interest Act. The mora interest rate is currently set at 9% per annum. We suggest that the debt collector/lawyer proceed to ask the mora interest rate to avoid over-reaching and unnecessarily burdening the consumer.
c. When does the in duplum rule apply?
The common law in Duplum rule will apply in this instance which provides that the interest may not exceed the capital outstanding. In other words once the interest is equal to the capital outstanding, interest must cease to be levied. Section 103(5) of the NCA will not be applicable.