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Questions and Answers
What does a credit provider have to assess and how must the assessment take place?
What does a credit provider have to assess and how must the assessment take place?
A credit provider must assess a consumer's general understanding and appreciation of the risks and costs of the proposed credit, as well as the rights and obligations of the consumer under the credit agreement. The assessment must be done in a form and manner as prescribed.
Study Notes
Credit Assessment
- A credit provider must assess a consumer's creditworthiness and ability to repay the credit.
- The assessment must be based on information about the consumer's financial situation, including their income, expenses, financial obligations, and credit history.
- The credit provider must take reasonable steps to verify the consumer's identity and the accuracy of the information provided.
- The assessment must be reasonable and transparent, considering all relevant information and taking into account the consumer's individual circumstances.
- The credit provider must also consider the consumer's requirements and objectives, and ensure that the credit contract is 'not unsuitable' for the consumer.
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Description
Test your knowledge of the National Credit Act (NCA) with this quiz. Explore the objectives and history of the NCA, the 4-step approach to determine its applicability, main categories of credit agreements, and the difference between credit facilities and instalment agreements. Delve into section 8(4)(f) of the NCA and its purpose, as well as the legal precedents set in the Ratlo and Evens cases.
