Hi,
What % interest may be charged on outstanding debtors?
What are the guidelines regarding charging interest?
Hi,
What % interest may be charged on outstanding debtors?
What are the guidelines regarding charging interest?
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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J7J (16-Apr-13)
Thank you very much for this helpful info!
Really appreciate it!
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?
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
15 % works for us
Well i was not aware of Interest on outstanding debtors.Thanks for info.
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