What a credit agreement actually is
The National Credit Act divides credit into categories, and the category determines the rules: what may be charged, what must be disclosed, and what protections apply. Knowing which one you are signing tells you which rules govern it.
A credit facility gives you access to an amount you can draw down and repay repeatedly — a credit card, a store account, an overdraft. Interest is charged on what you use, and the limit stays available.
A credit transaction is a defined advance repaid on defined terms: short-term loans, personal loans, vehicle finance, home loans. Each is its own category with its own rate caps.
A credit guarantee is where you undertake to satisfy someone else’s obligation. Standing surety makes you liable for the full debt if the borrower defaults, and this is the one people most often sign without appreciating the exposure.
Whichever it is, the same core protections apply: a pre-agreement quote itemising the cost, an affordability assessment, the right to settle early, and access to the complaints process. What varies is the maximum that may be charged.
Related
Sources and last checked
- National Credit Act 34 of 2005 and its regulations — Government, as at 10 August 2026.
Page last checked 10 August 2026. Statutory caps and lender terms change — confirm anything you intend to rely on with the provider or the National Credit Regulator. Found something wrong? Tell us and we will correct it.