Short Term Credit Agreement Template for South Africa

The Short Term Credit Agreement is essential for any credit provider operating in South Africa who offers short-term credit facilities to consumers. This document is specifically designed to comply with the National Credit Act 34 of 2005 and its regulations, which mandate specific disclosures, maximum interest rates, and fees. The agreement is used when providing credit for periods typically not exceeding 12 months and must include mandatory provisions protecting both the credit provider and consumer. It contains detailed information about the credit facility, repayment terms, interest calculations, and all associated costs. The document is crucial for ensuring regulatory compliance and establishing clear legal obligations between the parties involved in the credit transaction.

1. Parties: Identification of the credit provider and consumer, including registration numbers and NCR registration details

2. Background: Brief context of the credit agreement and purpose of the loan

3. Definitions: Definitions of key terms used in the agreement, including statutory terms from the National Credit Act

4. Loan Amount and Purpose: Clear statement of the principal debt amount and purpose of the credit

5. Interest Rate and Charges: Detailed breakdown of interest rate, initiation fees, service fees and other charges as per NCA regulations

6. Term and Repayment: Duration of the loan and repayment schedule, including payment dates and amounts

7. Method of Payment: Acceptable payment methods and bank account details for repayment

8. Early Settlement: Consumer's right to settle the agreement early and associated procedures

9. Default and Consequences: What constitutes default and the consequences thereof, including collection procedures

10. Consumer's Rights: Statutory rights under the NCA including right to information and statements

11. Credit Provider's Rights: Rights of the credit provider including right to cession and assignment

12. General Terms: Standard contractual provisions including notices, amendments, and governing law