In the case of pawnshops, the loan is paid and the borrower provides collateral assets with a resale value greater than the credit. The creditor has the right to sell the property if the money is not repaid on an agreed date and to retain the proceeds of the sale. The consumer must also, upon request, tell the lender or sheriff the address of the goods, as well as the name and address of the owner of the premises. Consumers have the right to obtain an offer and a credit contract in an official language that they read or understand, as long as it is reasonable. All documents that are not required must be available in a plain language (a language that an ordinary consumer understands with average reading and writing skills and minimal credit experience). A consumer can at any time, prior to termination, reinstate a late credit contract by paying all outstanding amounts, plus late fees and debt performance fees until today. The consumer can then recover the membership property, but not if the product has already been sold. Interest rates and fees are only maximum amounts. The Department of Trade and Industry hopes that the credit sector will not “jump at maximum rates” and has stated that it has the power to adjust these rates quickly if necessary.
A “credit transaction” can refer to one of the different types of transactions. The most important for current purposes are the following, but this is not the case for large contracts such as mortgages. When a consumer wants to pay a loan, they must first cancel the lender for a period of three months. When a mortgage is terminated, the consumer is responsible for cancelling bonds. The difference between an auxiliary credit contract and a credit contract was found by the Tribunal in the case of MNV Textiles (Pty) Ltd/Chalain Spareinves 14 CC 2010 (6) SA 173 (KZD). The Tribunal found that the main difference between a credit facility and an auxiliary credit contract is that fees, fees or interest are payable only under an auxiliary credit contract, when the consumer does not pay his debts on the agreed date and the interest is collected only to compensate the lender in the event of a late payment. The minister imposes, within the meaning of section 103 of the act, the interest rates that can be calculated under an auxiliary credit contract. The current interest rate is 2% per month, which amounts to 24% per year, which can be calculated on payments in the event of default within an auxiliary credit contract. If a credit provider correctly terminates a credit contract, the court can order the seizure of the goods, so that for the sale of the goods the account to be settled. This procedure follows the usual common law. In certain circumstances, consumers may terminate contracts (in writing and duly provided) within five business days of signing. This cooling fee applies only to leases and temperance contracts in a location other than the lender`s registered premises.
As a general rule, this right applies to increments (such as cars, books, household appliances) made at the consumer`s home or workplace. The consumer must return the goods purchased and the credit provider must repay the amounts paid by the consumer within seven days of the cancellation, less: the law contains detailed provisions on bank statements.