Responsible Lending

Why Responsible Lending Matters

Responsible lending protects consumers from predatory practices and unsustainable debt. In South Africa, the National Credit Act (NCA) and the National Credit Regulator (NCR) ensure lenders assess your ability to repay before granting credit.

At Credizen, we promote responsible borrowing by helping you:

• Compare loans transparently
• Understand costs and risks
• Borrow only what you can afford
• Know your rights as a consumer

1. The National Credit Act (NCA)

1.1 Key Protections

The NCA guarantees:

• Affordability Assessments: Lenders must verify you can afford the loan
• Clear Disclosure: All fees, interest rates, and terms must be explained
• Fair Treatment: No discrimination based on race, gender, or disability
• Right to Cancel: 5-7 business days to cancel without penalty
• Protection from Harassment: Debt collectors must follow strict rules

1.2 Reckless Lending

Under the NCA, it is illegal for lenders to grant credit without assessing your ability to repay. If a lender violates this, you may have grounds to cancel the agreement.

2. The National Credit Regulator (NCR)

2.1 Role of the NCR

The NCR is the government body that:

• Registers and regulates credit providers
• Enforces the National Credit Act
• Educates consumers about their rights
• Investigates complaints about reckless lending

2.2 Contact the NCR

2.3 Verify Lender Registration

3. Your Rights as a Borrower

3.1 Right to Information

You have the right to:

• Receive a pre-agreement statement showing all costs
• Understand the Annual Percentage Rate (APR) and total repayment amount
• Request a copy of your credit report (free once per year)
• Know why you were declined (if applicable)

3.2 Right to Cooling-Off Period

After signing a credit agreement, you have 5-7 business days to cancel without penalty or reason. This applies to most personal loans and credit cards.

3.3 Right to Early Settlement

You can repay your loan early at any time. The lender may charge a settlement fee (capped by law), but you save on future interest.

3.4 Right to Fair Treatment

Lenders and debt collectors must:

• Treat you with respect (no harassment or threats)
• Not contact you at unreasonable hours
• Not share your debt details with third parties (except legal parties)
• Provide a clear dispute resolution process

4. Responsible Borrowing Guidelines

4.1 Only Borrow What You Can Afford

4.2 Understand the Total Cost

Don't focus only on monthly payments. Calculate:

• Total Repayment Amount: Principal + interest + fees
• Cost of Credit: How much more you pay than the borrowed amount
• APR (Annual Percentage Rate): True cost including all fees

4.3 Have a Repayment Plan

Before borrowing, ask yourself:

• Do I have a stable income to cover monthly payments?
• What happens if I lose my job or face an emergency?
• Can I build an emergency fund instead of borrowing?
• Will this debt prevent me from saving for future goals?

4.4 Avoid Multiple Loans

Taking out multiple loans to pay existing debt is a red flag of over-indebtedness. This spiral can lead to:

• Unmanageable monthly payments
• Damaged credit score
• Legal action (judgments, garnishees)
• Asset repossession

5. Warning Signs of Over-Indebtedness

5.1 Get Help Early

If you're struggling with debt, contact a registered debt counselor under the National Credit Act. Debt review can:

• Reduce monthly payments
• Stop legal action
• Extend repayment terms
• Protect your assets

6. Debt Management Resources

6.1 Debt Counseling (Debt Review)

If you're over-indebted, apply for debt review through a registered debt counselor. This legal process:

• Assesses your financial situation
• Negotiates with creditors for lower payments
• Consolidates debts into one monthly payment
• Provides legal protection from creditors

Note: While under debt review, you cannot take on new credit.

6.2 Find a Debt Counselor

6.3 Free Financial Education

Learn more about managing money:

• NCR Consumer Education: www.ncr.org.za/consumer-education
• MyMoney123: www.mymoney123.co.za (NCR-backed budgeting tool)
• South African Savings Institute: www.savingsinstitute.co.za

7. How to Lodge a Complaint

7.1 Against a Lender

If you believe a lender violated the NCA:

1. Contact the lender first: Most lenders have internal complaints departments
2. File a complaint with the NCR: complaints@ncr.org.za or 0860 627 627
3. Escalate to the Credit Ombud: www.creditombud.org.za

7.2 Against a Debt Collector

Debt collectors must be registered and follow the Debt Collectors Act. If harassed, report to:

• NCR: 0860 627 627
• Council for Debt Collectors: www.cdcsa.org.za

7.3 Credit Bureau Disputes

If your credit report has errors, contact the bureau directly:

• TransUnion: www.transunion.co.za
• Experian: www.experian.co.za
• XDS: www.xds.co.za
• Compuscan: www.compuscan.co.za

8. Credizen's Commitment to Responsible Lending

At Credizen, we promote responsible borrowing by:

• Featuring NCR-Registered Lenders Only: We verify lender registration
• Transparent Comparisons: Clear APR, fees, and terms for every offer
• Educational Content: Guides on budgeting, debt management, and consumer rights
• No Predatory Practices: We do not promote unaffordable loans
• Privacy Protection: POPIA-compliant data handling

While we earn commissions from lenders, we prioritize your financial well-being. If a loan doesn't suit your needs, we'll tell you.

Frequently Asked Questions