An introduction to debt counselling

  • Debt counselling assists over-indebted consumers get budget advice, reduce payments and restructure debts.
  • During debt counselling, credit providers cannot issue letters of demand, summonses or enforce legal steps as the consumer will be protected.
  • Approach a debt counsellor before legal action is taken.
  • Should the consumer be married in community of property, both parties will have to apply for debt counselling.

The pros and cons of debt counselling

Debt counselling pros:

  • Credit providers cannot attach any assets or take any further legal action against you.
  • Make only one regular monthly payment to reduce your debt.
  • Get invaluable advice on ways to cut your monthly costs and restructure your repayments.

Debt counselling cons:

  • You won’t be able to enter into any new credit agreements.
  • You cannot withdraw from debt counselling once they have been confirmed as over-indebted.

The National Credit Act

  • About the National Credit Act

    The National Credit Act (NCA) protects your rights as a consumer by regulating the granting of loans or credit. In short, it makes responsible lending a shared responsibility between you and your credit provider.
  • Which credit agreements are regulated by the Act?

    • Banks:
      • Loans
      • Mortgages (Bonds)
      • Overdrafts
      • Credit cards
      • Vehicle finance
      • Any other personal finance

    For more information visit National Credit Regulator website.

    • Retailers:
      • Furniture finance
      • Clothing accounts
      • Store
    • Other categories:
      • Microloans and pawn transactions
      • Any other type of credit or loan provided to you

The National Credit Act

  • Benefits of the National Credit Act

    • You’re not discriminated against when you look for credit.
    • Get all the information you need on credit agreements in the official language of your choice.
    • Understand all the terms used.
    • Understand all fees, costs, interest rates, the total instalment and any other details.
    • Get the best products for your needs and the most responsible lending options.
    • Your interest rate is reasonable.
    • Speak to a debt counsellor should you experience difficulty with your repayments.
    • You can say no to increases on your credit limit.
    • You decide whether or not you want to hear about products or services from credit suppliers via telephone, SMS, mail or email campaigns.
  • What can you do to borrow affordably and wisely?

    • The following must be disclosed by the bank:
      • Avoid buying goods on credit just because you can.
      • Always pay off your monthly instalments on or before the due date.
      • Always pay off the loan with the highest interest rate first.
      • Only apply for credit from a registered credit provider, such as Absa.
      • Give the credit provider all the information they ask for to help them understand how much credit you can comfortably afford to pay back.
      • Avoid turning short-term debt (like credit cards) into long-term debt (such as your home loan) simply to increase your cash flow now.
      • Find out what your credit rating is and update your information regularly
  • What is Absa’s language statement of intent?

    The National Credit Act provides that a customer has the right to receive documents in plain and understandable language. The National Credit Regulator has approved for Absa to make these documents available in English and Afrikaans, but should a customer require assistance in another official language, this can be reviewed.
Need more help?

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