National Credit Act (NCA)
What is the NCA?
The NCA is an act of law instituted to regulate the way in which
credit is granted to consumers. In effect the law is designed to
protect the consumer from over-zealous businesses that grant credit
too freely, resulting in one’s debts becoming unmanageable. In
layman’s terms, it is to protect you from getting too far into debt.
Who does the NCA affect?
The NCA affects all citizens of South Africa. The law is designed to
protect and assist you in managing your credit-worthiness.
What does this mean for me, the prospective home-buyer?
In the past the only prerequisites for obtaining a bond were a clean
credit record, a steady income and an ID book! The banks would
generally grant a bond based on about 30% of your gross income –
irrespective of any other financial commitments you had.
In short, the NCA now stipulates that your bond amount will be
calculated on your nett income. Thus all your expenses need to be
deducted from your income before any amount can be approved as a
loan / bond.
You will need to prove your income and expenses, and show that you
will be able to afford the repayments on your bond amount from your
nett disposable income.
Will this affect my chances of obtaining a bond?
If you have a heavy credit load at present it may affect your
chances of obtaining a bond. In some instances you may only qualify
for a lesser amount than you requested.
How will I know how much I can afford to pay off on a house?
The best way to go about it is to speak to one of our agents for
some free advice!
We will help you to determine the amount you will qualify for. We
can arrange a pre-approved bond for you before you start
house-hunting. Through our relationship with various bond
originators we will be able to obtain approval from all the major
banks. (Depending, of course, on your current financial situation).
What documentation do I need to assist with this process?
At your consultation with one of our agents, please ensure that you
bring along the following:
1. A copy of your ID document
2. Bank statements for the past three months
3. All your bank account details (of ALL your accounts)
4. Proof of your physical address (such as a utilities account)
5. Proof of income
5.1 Salary slip (for wage / salary earners)
5.2 Six months bank statements / proof of income (for commission
5.3 A letter from your accountant detailing your income (if self
5.4 Documentary proof of a legal entity, proof of income, letter
accountant providing details of the finances (Close Corporation or
6. A detailed list of all your expenses.
Your expenses include all your current debts and credit facilities,
store accounts, credit cards, vehicle and furniture accounts, and
the interest rates that apply to all of these.
You must also provide details of how much you spend every month on
housekeeping, travel, entertainment, salaries / wages paid,
This might sound like a daunting task, but we will guide you through
the process from start to finish!
It is better to be pre-qualified than to be disappointed later!
Call us now for a free consultation with one of our agents.