What is a Credit Provider?
July 1, 2018
The way you deal with your credit will help you make up your mind as to whether you think credit providers are good or bad. For many, they’re a lifesaver. A means to own a car or having a holiday that they believe they would never have had the ready cash to afford. So what is a credit provider?
- They offer financial solutions to customers
- They allow you to have access to goods and services you might never have been able to save for
- Failing to register means the credit provider won’t be able to recover interest or other fees charged to the consumer
- The credit provider is responsible for protecting consumers while promoting fair, competitive and responsible lending
Financial Solutions or Financial Woes – What is a Credit Provider
These credit providers are usually companies which offer financial solutions to consumers. In fact, you can say that anyone who exchanges services, products or money with added interest is a credit provider. In other words, if you’re renting property from a landlord, the landlord is a creditor.
Anyone who is over the age of 18 and who his legit with no fraudulent activities behind their name can be a credit provider and once you are registered with the National Credit Regulator, you can legally enter into credit agreements with consumers. As a credit provider in South Africa, you’ll have to comply with the fees as set out by the regulator.
The benefit of a creditor for instance when you are buying a car is that you don’t have to find a huge sum of money – the creditor pays for the car and you can then make affordable payments or instalments over a certain period. For many, taking more credit over and above what they already have is the start to their financial woes.
Credit Assessments must be Performed
South Africans are battling with debt and overloaded with bad credit. These days, credit providers need to take the necessary steps to ensure that they do not offer credit to anyone unless they perform a credit assessment on the consumers’ affordability. In fact, it is mandatory for credit providers to perform these affordability assessments before extending credit to a consumer.
Also, in terms of the new amended Act, consumers also have a part to play and have to provide credit providers with information on their income and expenses.
Be Alert to Fake Credit Providers – What is a Credit Provider
There are plenty of rogue opportunists in South Africa. And the NCR warns consumers to be on guard and not to enter into loans with so-called credit providers. Some of these credit providers want to retain bank cards as a method of debt collection. The NCR is urging South Africans to only enter into loans with properly registered credit providers.
Not only that, consumers shouldn’t make upfront payments to credit providers either when they apply for credit. This is actually unlawful and any consumers who have had to do this are encouraged to open a criminal case with the police about these fake credit providers. Be warned, because you won’t be able to get this money back.
Next: Fill in the form on this page and submit it to request a Loan
All info was correct at time of publishing