In the case of an application for a mortgage bond, the credit provider must check your repayment history 14 business days before approving your loan.
Magauta Mphahlele, the chief executive of the National Debt Mediation Association, says that, in terms of the prescribed affordability guidelines, where a consumer takes out a consolidation loan, credit providers are required to take reasonable steps to ensure that the loan is used to settle other debt and not to finance further spending.
A reckless credit agreement results in a consumer becoming over-indebted and unable to repay his or her debts or fund his or her basic living expenses.
Deborah Solomon, a debt counsellor and the founder of DCI (an online information portal for debt counsellors and consumers), says the prescribed affordability assessment will go a long way towards preventing reckless lending, which begins when the credit provider does not process the application for credit properly. Enhanced powers of the tribunal Before the Act was amended, if your debt counsellor believed that he or she had evidence that you were a victim of reckless lending, the counsellor had to engage an attorney to apply to a magistrate’s court for an order of reckless lending against your creditor.