National Credit Act Hurting Borrowers

With officials making it tougher for South Africans to get credit, and the passing of the new National Credit Act making it almost impossible, more and more people are turning to loan sharks to finance their auto loans. The new act is causing less people to be able to take out mortgages and auto loans, because more and more of them are being turned down by them.

Car salesmen say that they have more people being declined for auto loans than they have ever seen before. Banks and such say that they also have an increase in rejected car loans since June 1st when the act became official. However, some people are seeing an increase in their auto loan activity, but that would be the loan sharks.

Legal sources say that they are seeing more and more people turning to the illegal sources to get loans, because they are getting rejected by legal channels and therefore must go somewhere. However, these car loans are getting people into more debt, and thereby more trouble because of the fees and such that these illegal channels are able to add onto the auto loan.

Experts say that many South Africans are not even trying to qualify for their auto loans through banks because they don’t have any fixed assets and don’t think they would even qualify. This means more and more of them are getting deeper into debt because they are paying extra fees and interest due to the illegal nature of the car loan.

Experts say that the way that the credit industry in their country is going, the act will only end up being a hindrance instead of a help.
 

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