Read the fine print before borrowing this January

Adv. Kedilatile Legodi provided seven top tips to review before entering into any credit agreements at the beginning of the year

January 13, 2020

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MBOMBELA – The festivities are over and back to school season is nearly upon us. Consumers who are parents know all too well the enormous hole this can leave on the wallet.

This is a period during which financially over-extended consumers need to borrow a buck or two to fill the holes and get the necessities children need to get back to school.

Adv. Kedilatile Legodi, the acting manager of education and communication at the National Credit Regulator, said, ““Consumers are reminded that credit is expensive, therefore they should only borrow when it is absolutely necessary to do so and only from credit providers registered with the NCR.”

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Credit smart consumers understand the total cost of the credit applied for before signing on the dotted line. This includes interest, once-off initiation fees, monthly service fees and credit life insurance.

To further this understanding, loan applicants should be given a pre-agreement statement and quotation that discloses the total amount repayable for the money borrowed. This should be inclusive of all related costs at the end of the repayment period.

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According to Legodi, the consumer is obliged to be truthful and honest when applying for credit by disclosing all the correct and relevant information pertaining to their financial status.

“Credit that is granted based on incorrect financial disclosure by the consumer, may lead to inability to repay the debt resulting in financial distress,” she concluded.