Ask for a quote before accepting credit – NCR

The National Credit Regulator (NCR) advise consumers to get savvy and that they should ask creditors for a detailed quotation before accepting credit. Further they recommend thinking about the offer rather than just signing it automatically.

The NCR say that many consumers ” fail to grasp the important details” before adding their signatures to important and binding documents.

This was a huge problem in the past. One that the National Credit Act sought to set right by requiring that contracts be understandable, in simple language (and available in the language of the consumer where possible/reasonable).

However even with improvements brought about by the NCA the NCR are still concerned that consumers are not taking the time to consider the cost of credit before making use of it.

The NCR’s Lebogang Selibi says this has led to many South Africans taking on more debt than they can actually afford.

Mz. Selibi says than when opening a credit account or taking a loan there could be a credit insurance cost added to the cost of the credit , as well as, a once-off initiation fee at a maximum of 15 percent of the principal debt, not to mention a charge of R57 (incl VAT) as a service charge on the account. All these added fees should be taken into account.

I would advise consumers to ask for what we call a ‘pre-agreement statement and quotation’. ” I’s important for people to know what the true cost of their credit is”

A Quotation or Pre Agreement would include the cost of credit interest, the amount of money being borrowed, services and initiation fees. The Pre Agreement should also set out the credits term and conditions.

“You can take these documents home and actually have a look before you go back and sign a credit agreement. So a pre-agreement statement and quotation are very important for consumers,” she said.

Not a bad idea when making an important decision such as taking out a loan or buying an item on credit.

Taking control of your financial future starts with making informed decisions. Before accepting credit, ensure you understand the full cost by requesting a detailed quote or pre-agreement statement. At Zero Debt, we support you in navigating these crucial financial steps. Contact our experienced debt counsellors today for personalized assistance and expert advice. Don’t wait—reach out via our contact page or call us directly at 086 111 3749. If you’re pressed for time, simply request a Free Call Back, and one of our counsellors will get in touch with you. Let Zero Debt guide you towards financial freedom.

FAQs and Answers

1. Why should I ask for a credit quote before signing?
Requesting a credit quote helps you understand the full cost of the loan, including interest, fees, and conditions. This prevents hidden surprises and allows you to make an informed decision before accepting any financial agreement.

2. What is included in a pre-agreement statement and quotation?
A pre-agreement statement outlines interest charges, the amount borrowed, credit insurance, initiation fees, service charges, and repayment terms. You can review it before committing to any credit deal.

3. Is asking for a credit quotation my legal right in South Africa?
Yes, under the National Credit Act, credit providers must issue a pre-agreement statement and quotation upon request. This protects consumers from entering into unaffordable credit contracts.

4. Can I take a credit quotation home to review?
Absolutely. You are encouraged to take the pre-agreement documents home, compare offers, and assess affordability before signing. Avoiding rushed decisions reduces financial risk.

5. What hidden charges should I look out for in credit agreements?
Common extra costs include credit insurance, once-off initiation fees (up to 15% of the principal), and monthly service fees (around R57 incl. VAT). Always confirm these in writing.

6. How does understanding credit terms prevent over-indebtedness?
Knowing total costs and repayment timelines helps you assess affordability and avoid taking on debt beyond your means. It’s a key step in financial responsibility.

7. What should I do if I’ve already signed without seeing the full cost?
If you’re struggling due to unaffordable repayments, contact Zero Debt for debt counselling. We help restructure your debt and reduce your monthly obligations. Visit our Debt Counselling page for help.

8. Where can I get help to understand a credit quote better?
Zero Debt’s experienced consultants can walk you through a pre-agreement and explain all associated fees. Use our Contact Page to get personal support or request a Free Call Back.