The Credit Extension Letter is a critical document in South African financial services, used when a credit provider offers new credit facilities or modifies existing ones. It must comply with the National Credit Act 34 of 2005 and other relevant financial legislation, making it more than just a commercial document. The letter serves multiple purposes: it formally communicates the credit offer, provides legally required disclosures, outlines all costs and terms, and creates a clear record of the credit arrangement. Used by banks, financial institutions, and other credit providers, it forms part of the formal credit application and approval process, requiring careful attention to both commercial terms and regulatory compliance. The document is particularly important in South Africa's highly regulated credit environment, where transparency and consumer protection are paramount.

1. Letterhead and Date: Company letterhead including registration numbers, NCR registration number, and current date

2. Recipient Details: Full name and address of the recipient/customer

3. Subject Line: Clear indication that this is a Credit Extension Letter

4. Credit Facility Details: Specific details of the credit being offered, including amount, purpose, and term

5. Cost of Credit: Detailed breakdown of interest rates, fees, and charges as required by the NCA

6. Terms and Conditions: Key terms and conditions of the credit extension, including repayment terms

7. Legal Disclosures: Mandatory disclosures required under the National Credit Act

8. Acceptance Provisions: Instructions for accepting the offer and deadline for acceptance