Relief for consumers: max interest rates revealed
According to the Department of Trade and Industry (dti), the new maximum interest rates for all types of credit agreements could reduce the cost of credit for consumers.
The final notice on the "Review of Limitations of Fees and Interest Rates" was published in the Government Gazette on 6 November. The final maximum interest rates were calculated at the current repo rate (RR) of 6%. Developmental credit transactions have been increased from 32% to 33%.
The dti said in a statement:
"For unsecured credit transactions it is RR + 21% per year; for mortgage agreements it is RR + 12% per year; for credit facilities it is RR + 14% per year; for developmental credit agreements it is RR + 27% per year and for other credit agreements it is RR + 17% per year."
DA shadow minister of trade and industry Geordin Hill-Lewis called the new interest rates a victory for all credit consumers in South Africa. Dti spokesperson Sidwell Medupe believes the final regulations will bring about a reduction of the cost of credit when consumers are applying for credit.