Reckless lending and what it means for you
Reckless lending is a defined concept in the National Credit Act, not a figure of speech. Where a credit provider granted credit without properly assessing affordability, or granted it knowing you could not afford it, the agreement was recklessly granted — and the remedies available are substantial.
What you need to know
The Act sets out when an agreement is reckless: where the provider failed to conduct the required assessment, or where it entered the agreement despite the assessment showing you did not understand it or could not afford it.
A court can suspend the force of a reckless agreement, or set aside all or part of your obligations under it. In practice this most often arises through the debt review process, where a counsellor identifies agreements that should never have been granted.
This is why the affordability assessment matters to you and not just to the lender. It is an obligation on the provider, and a failure to meet it creates a right for you.
If you believe an agreement was recklessly granted, a registered debt counsellor or an attorney is the route. Documentation from the time — the quote, what you disclosed, your bank statements — is what the argument rests on.
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.