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Usury Act, 1968 (Act No. 73 of 1968)

6B. Consequence of notice relating to payment before due date of outstanding principal debt and finance charges in terms of certain money lending transactions or credit transactions

 

 

Referenced by:

 

1) Where--
a) the principal debt and finance charges owing by a borrower or a credit receiver in connection with a money lending transaction or a credit transaction have, in terms of an agreement between himself and the moneylender or credit grantor concerned, to be paid in instalments, including finance charges, over a period in the future; and
b) such borrower or credit receiver by notice in writing in accordance with a provision, as contemplated in section 3A(1)(a), in the instrument of debt concerned, has notified such moneylender or credit grantor of his intention to pay the outstanding balance of the principal debt and finance charges thereon (not being the final instalment) in one amount before the due date thereof and on or before the date, as contemplated in section 3A(1)(c), stated in such notice,

such money lending transaction or credit transaction shall be deemed to be a transaction in respect of which payment of the principal debt and finance charges thereon has to be made in a manner other than by way of regular payments, and such moneylender or credit grantor shall recalculate the finance charges payable in respect of such transaction--

i) in accordance with the provisions of section 2(5) at the annual finance charge rate provided for in such instrument of debt; and
ii) as from the date of such transaction until the date on which such borrower or credit receiver intends to pay the said outstanding balance and finance charges in one amount,

and the finance charges so recalculated, notwithstanding anything to the contrary contained in such instrument of debt but subject to the provisions of section 4A, shall be the maximum finance charges which may be demanded, received or recovered in respect of such transaction by such moneylender or credit grantor.

 

2) The provisions of subsection (1) shall apply mutatis mutandis where a borrower or credit receiver pays the outstanding balance of the principal debt and finance charges thereon (not being the final instalment)--
a) owing by him in connection with a money lending transaction or a credit transaction; and
b) which in terms of an agreement between himself and the moneylender or credit grantor concerned, have to be paid in instalments, including finance charges, over a period in the future,

before the due date thereof in one amount without notifying in writing such moneylender or credit grantor in accordance with a provision, as contemplated in section 3A(1)(a), in the instrument of debt concerned of his intention so to pay such outstanding balance and finance charges, and the date on which--

i) such outstanding balance and finance charges are so paid or the minimum period, as contemplated in section 3A(1)(b), provided for in the instrument of debt concerned, has expired, whichever date is the later date, shall be deemed to be the date on which notice was so given; and
ii) the period, as contemplated in section 3A(1)(a), provided for in the instrument of debt concerned, would have expired if such period had commenced on the applicable date referred to in paragraph (i), shall be deemed to be the date on which such period expired.