What is reckless lending? advertorial

2015-04-30 15:11

YOU often hear in the media about reckless lending by credit providers where they provide credit to you when you cannot afford the repayments.

Credit is anything from a loan to purchasing furniture or clothing on account where you pay monthly instalments.

The National Credit Act requires all credit providers to perform an affordability assessment on you before granting you credit. Put simply you must have sufficient income available after all your expenses to repay the debt.

In many instances credit providers either do not perform an affordability assessment or “massage” the numbers to suit their requirements despite the fact you do not earn enough to make the repayments.

This inevitably leads to you falling into arrears and the debt collectors’ start calling you and harassing you for payments. In many cases you borrow more money to meet the existing repayments and the debt spiral begins.

Fortunately the National Credit Act provides protection to consumers who are victims of reckless lending and your debts can be written off.

Registered debt counsellors are required to investigate reckless lending on your behalf and request documentation from the credit provider to confirm you were able to afford the credit when you applied.

Where you could not afford the repayments the debt counselling can bring a case of reckless lending on your behalf and apply for the loan to be written off and repayments refunded.

If you think you are a victim of reckless lending contact one of the professional consultants at National Debt Counsellors on 087 727 9728 or visit their website www.nationaldebtcounsellors.co.za

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