The maximum interest rate on finance agreements under the Usury Act were decreased this week.
The Usury Act aims to protect consumers by limiting the interest rates that you can be charged for credit transactions which include loans, overdrafts, hire purchase transactions and leasing contracts. As from September 7, banks and other financial institutions may not charge you more than 24 percent for amounts below R10 000 and 21 percent for amounts above R10 000. Prior to February this year, the ceiling was R6 000.
Certain moneylenders are exempted from the requirements of the Usury Act, but they must register with the Micro Finance Regulatory Council.