Interest on outstanding debtors - what % can be charged?

[J7J]

Hi,

What % interest may be charged on outstanding debtors?

What are the guidelines regarding charging interest?

[Dave A]

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.

[J7J]

Thank you very much for this helpful info!

Really appreciate it!

[bron88]

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?

[flaker]

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

[HR Solutions]

15 % works for us

[Adair55]

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