The National Credit Act, in plain terms
The National Credit Act 34 of 2005 is the law governing consumer credit in South Africa. It is long and technical, but the protections that matter to a borrower come down to a handful of things — and knowing them changes how you read any credit offer.
What you need to know
It requires registration. Anyone granting credit as a business must be registered with the National Credit Regulator, and the register is public — which is what makes checking possible.
It requires an affordability assessment before credit is granted, and it makes granting credit recklessly an act with consequences for the provider.
It caps what you can be charged: interest, initiation fees and service fees, all by credit category. These are maximums, and the categories matter.
It requires disclosure. The pre-agreement quote must set out every cost, including the total cost of credit as a single comparable figure, and must be held open long enough for you to compare it.
It gives you rights after signing: to settle early and pay interest only to the settlement date, to receive statements, to substitute your own credit life policy, and to have complaints heard.
And it creates the debt review process for consumers who are over-indebted, with court protection while a restructured payment is maintained.
What the National Credit Act allows a lender to charge
Maximums for short-term credit under the National Credit Act 34 of 2005. A registered lender may charge less — never more.
| Charge | Legal maximum | How it works |
|---|---|---|
| Interest — first loan | 5% per month | Applies to your first short-term loan in a calendar year. |
| Interest — repeat loan | 3% per month | Applies to further short-term loans taken in the same calendar year. |
| Initiation fee | R165 + 10% above R1 000, capped at R1 050 | Charged once, on the amount you borrow. Excludes VAT. |
| Service fee | R60 per month | Charged monthly for the life of the loan. Excludes VAT. |
| VAT | 15% on the fees | Added to the initiation and service fees — not to interest. |
Fee caps are published excluding VAT. With 15% VAT a R1 050 initiation fee costs you R1 207,50 and a R60 service fee costs R69 a month. Always compare the VAT-inclusive figure on your pre-agreement quote.
Related
Sources and last checked
- National Credit Act 34 of 2005 and its regulations — Government, as at 10 August 2026.
- National Credit Regulator — register of credit providers — Regulator, 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.