Credit Agreement Template for South Africa

A Credit Agreement is a legally binding contract that sets out the terms and conditions when someone borrows money in South Africa. It spells out key details like the loan amount, interest rates, repayment schedule, and what happens if payments are missed. Under the National Credit Act, these agreements protect both lenders and borrowers by making everything clear upfront.

The agreement must follow strict rules set by South African law, including disclosure of all fees, the total cost of credit, and the borrower's rights. It covers everything from personal loans and credit cards to vehicle finance and home mortgages, giving both parties a clear roadmap for their credit relationship.

Use a Credit Agreement any time you're lending or borrowing money in South Africa - from offering a personal loan to a family member to financing a new car or home. The National Credit Act requires these agreements for most loans above R50,000, but they're valuable even for smaller amounts to prevent misunderstandings and protect both parties.

Banks, micro-lenders, and private individuals need Credit Agreements when extending credit facilities, opening store accounts, or providing installment sales. Getting it in writing helps avoid disputes, ensures compliance with consumer protection laws, and makes the repayment terms crystal clear from day one.

• Money Lending Contract: Basic loan agreement for personal or business lending, with fixed terms and repayment schedule
• Incidental Credit Agreement: For unexpected or indirect credit arrangements, like late payment fees or service charges
• Employee Credit Card Agreement: Governs company card usage, spending limits, and employee responsibilities
• Revolving Line Of Credit Agreement: Flexible credit facility allowing repeated borrowing up to a limit, common in business financing
• Revolving Agreement: Ongoing credit arrangement with variable borrowing and repayment options

• Banks and Financial Institutions: Primary lenders who draft and issue Credit Agreements for mortgages, vehicle finance, and personal loans
• Retail Credit Providers: Stores offering installment plans or store accounts must comply with NCA requirements
• Business Owners: Both as borrowers seeking finance and as credit providers when offering payment terms to clients
• Private Lenders: Individuals or companies offering loans must use compliant agreements to protect their interests
• Legal Practitioners: Draft and review agreements to ensure compliance with South African credit laws
• Credit Consumers: Individual borrowers who need to understand their rights and obligations under the agreement

• Borrower Details: Gather full legal names, ID numbers, addresses, and employment information for creditworthiness checks
• Loan Specifics: Calculate precise loan amount, interest rate, term length, and repayment schedule
• Security Details: Document any collateral or guarantees being offered to secure the loan
• Credit Checks: Run necessary credit bureau checks as required by the National Credit Act
• Compliance Review: Ensure agreement follows NCA requirements for interest rates and fees
• Plain Language: Draft terms in clear, simple English that both parties can understand
• Digital Tools: Use our platform to generate a legally-sound agreement that includes all mandatory elements

• Party Information: Full legal names, addresses, and contact details of lender and borrower
• Principal Terms: Loan amount, interest rate, fees, and total cost of credit as per NCA requirements
• Payment Schedule: Clear repayment terms, installment amounts, and due dates
• Default Provisions: Consequences of missed payments and remedies available to the lender
• Cooling-off Rights: Consumer's right to cancel within 5 business days
• Early Settlement: Terms for early repayment and any applicable penalties
• Dispute Resolution: Process for handling disagreements under South African law
• Signatures: Space for dated signatures of all parties and witnesses

A Credit Agreement differs significantly from an Intercreditor Agreement in both purpose and scope. While both deal with financial arrangements, they serve distinct functions in South African law.

• Primary Purpose: Credit Agreements establish the terms between a lender and borrower for a specific loan, while Intercreditor Agreements manage relationships between multiple lenders to the same borrower
• Parties Involved: Credit Agreements typically involve just two parties - lender and borrower. Intercreditor Agreements coordinate multiple lenders' rights and priorities
• Legal Requirements: Credit Agreements must comply with the National Credit Act's strict consumer protection rules. Intercreditor Agreements focus on commercial arrangements between sophisticated parties
• Timing of Use: Credit Agreements are created at loan origination, while Intercreditor Agreements often come into play when multiple lenders are involved or during debt restructuring