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National Credit Act, 2005 (Act No. 34 of 2005)

Chapter 5 : Consumer Credit Agreements

Part C : Consumer’s liability, interest, charges and fees

103. Interest


(1) Subject to subsection (5), the interest rate applicable to an amount in default or an overdue payment under a credit agreement may not exceed the highest interest rate applicable to any part of the principal debt under that agreement.


(2) A credit agreement may provide for an interest charge to become payable or be debited at any time after the day to which it applies.


(3) A credit provider must not, at any time before the end of a day to which an interest charge applies, require payment of or debit the interest charge.


(4) A credit agreement may provide for the interest rate to vary during the term of the agreement only if the variation is by fixed relationship to a reference rate stipulated in the agreement, which reference rate must be the same as that used by that credit provider in respect of any similar credit agreements currently being issued by it.


(5) Despite any provision of the common law or a credit agreement to the contrary, the amounts contemplated in section 101(1)(b) to (g) that accrue during the time that a consumer is in default under the credit agreement may not, in aggregate, exceed the unpaid balance of the principal debt under that credit agreement as at the time that the default occurs.


(6) The Minister may make regulations prescribing the manner in which interest is to be calculated and disclosed for the purposes of this Act.


(7) Subject to the review and approval of the National Credit Regulator, subsection (4) does not apply in respect of developmental credit agreements.