Tag archives: Interest

New NCA regulations prescribing maximum interest rates and service and initiation fees come into force as court application fails

The new regulations prescribing the maximum rates of interest, initiation fees and service fees that credit providers can charge come into effect on 6 May 2016. An urgent application by Micro Finance South Africa (MFSA) to stay the implementation of the new regulations pending the outcome of an application to set aside the Minister of … Continue reading

New prescribed interest rate

[CLICK HERE TO SEE THE UPDATED RATE FOR 2018 IN THIS POST] The prescribed rate of interest, effective from 1 March 2016, is 10.25% per annum. The prescribed rate of interest is linked to the repo rate.  This new figure is in accordance with the formula for calculating the prescribed rate (repurchase rate plus 3.5%).  … Continue reading

No interest on timely payment by insurer

A Minnesota appeals court refused to award interest on a claim by a homeowner, whose property was damaged by fire in October 2013, because the insurer had held up its end of the contract. The policy provided for assessment of the damages by an independent appraiser if the insurer and policyholder could not agree on … Continue reading

New prescribed rate of interest in effect

[CLICK HERE TO SEE THE UPDATED RATE FOR 2018 IN THIS POST] The prescribed rate of interest has been changed. With effect from 8 January 2016, interest will be charged at 9.75% per annum, up from the previous rate of 9%. Interest on debts will be calculated at the repo rate plus 3.5%. The repo … Continue reading

Islamic finance transactions: Is default interest payable?

Islamic finance transactions are governed by Shariah law. These cater for Islam’s prohibition on charging interest. A court will however apply default interest to such a debt when the debtor has failed to perform a contractual payment obligation under such agreement. The Supreme Court of Appeal in Lodhi 5 Properties Investments v FirstRand Bank Limited … Continue reading

Constitutional Court restores in duplum rule

The Constitutional Court has restored the law on the running of interest on outstanding debts – reversing the SCA’s 1997 decision that the institution of legal proceedings suspends the operation of the in duplum rule. The revised legal position applies to all debtors, except those whose court cases have been finalised with no possibility of … Continue reading

The scheme of the National Credit Act

Certainty in regard to the cost of the proposed credit is imperative. Common to all forms of a credit agreement for the purposes of the National Credit Act is the requirement of payment of a charge, fee or interest in return for granting credit. This covers any consideration or payment made by a consumer to … Continue reading
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