“A credit contract is illegal in this section, despite all the provisions of the common law, any other legislation or provision of an agreement, which is different, a court must order that – b) the credit provider must reimburse the consumer the money that the consumer pays to the credit provider with the interest calculated under that agreement – The provisions on unwary loans do not apply to a number of credit contracts, including in the case of certain credit contracts (usually installment contracts), the consumer only becomes owner when the full purchase price has been paid, and the credit provider is entitled to withdrawal. Until then, the lender has an interest in keeping the goods. Before entering into a credit contract, the lender must provide the consumer with a free declaration and offer in the form prescribed by the regulation (form 20 of the settlement, for small credit contracts). No agreement has been reached at this stage; the consumer is not obliged to sign or pay a tax. This is a new evolution of the law that aims to protect consumers. This document should contain the financial details of the proposed agreement (for example. B the amount of credit provided, the number and amount of payments, interest and other fees, payment required and credit insurance). Consumers must accept or reject the offer within five days to allow them to purchase for better or cheaper credits. Once the offer is accepted by the consumer, the credit contract can be concluded on its own. While credit provides access to products or services that cannot be acquired from a single monthly income, it can also be a dangerous instrument that can lead to high debts and debts. Unfortunately, in South Africa, too many people with too little money have been given too much credit. The end result is over-indebtedness that leads to an endless cycle of frustration for the consumer, who will never be able to repay his debts.
 “Unsecured credit transactions” are agreements for which there is no guarantee on debt (such as loans or sales on credit). The amount or time to repay is unlimited. Unsecured agreements over R8,000 and/or repayable agreements of more than six months fall into this category. The maximum interest rate is linked to the South African Reserve Bank `SARB` redemption rate ((return rate x 2.2-20% per annum) and is currently 39.8% per annum (based on the current rest of 9%). This maximum rate is almost twice the maximum allowed under the Usury Act, which applied until May 31, 2007 (20% per year). Furniture sales, for example, could now cost twice as much. The drastic reduction in interest rates conceals or conceals the actual cost of credit when initiation and service fees are added. These fees may remain largely hidden, with an emphasis on interest rates (better known to consumers) when products are marketed. Fees help keep interest rates low, which makes credit cheaper, although credit is not cheaper.
Abandoning the cost of credit away from interest and fees (which consumers do not know about) will increase the likelihood that consumers will be misled about the actual cost of credit. Many are attracted to borrow money that will cost much more than they originally anticipated. It is important that paralegales understand the risk that this concealment of the actual cost of credit will occur in order to warn their customers of this danger.