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Thread: Interest on outstanding debtors - what % can be charged?

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    Interest on outstanding debtors - what % can be charged?

    Hi,

    What % interest may be charged on outstanding debtors?

    What are the guidelines regarding charging interest?

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    Site Caretaker Dave A's Avatar
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    The norm is prime + 2% at (pick your major bank as benchmark).

    The maximum used to be prime + 10% under the Ursory Act. Nowdays it's defined by regulation in terms of the National Credit Act - Notice No. R. 489 of 2006 sets the maximum for incidental credit as 2% per month and seems to be the regulation of standing.

    One of the critical issues you don't want to fall foul of is disclosure. Take a look at our wiki page on incidental credit agreements for more info.
    Last edited by Dave A; 17-Apr-13 at 12:19 PM. Reason: typo
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    Thank you very much for this helpful info!

    Really appreciate it!

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    Do you need to be registered as a financial service provider to charge the interest? (I rent out a unit to my tennant and my friend said I cant charge them interest for late payment unless im registered) , is this correct?

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    No, you don't have to be a finance service provider to charge interest. However, have a look as to what your lease states with respect to payments of rentals and more especially late payments.You would be governed by that. i take it you do have a signed lease

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    Well i was not aware of Interest on outstanding debtors.Thanks for info.

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