Tips

Financial tip for week 6 January   2014

 Velapi Simons  - Bloemfontein

Question:- Please explain the in duplum rule and how it can assist me?

 

Answer:-  The in duplum started as far back as 686 AD. At that point in time  

                   the Romans had an economic boom and the  in duplum rule came into effect to

                     protect the people from exploitation by unscrupulous moneylenders.

 

                    the in duplum rule protects consumers. When unpaid capital and unpaid interest

                   reaches the same amount, interest stops.

 

                    Example:- If you borrow R 100 and unpaid interest reaches R 100, all interest

                                    stops. The moneylender can therefore only recover R 200 from you.

         

                                              If you make a payment of R 20.00, the amount is deducted from

                                                 unpaid interest. Your outstanding debt is now R 180 which is made

                                               up as follows:

                                                     Outstanding unpaid capital amount …………         R100.00

                                                     Outstanding unpaid interest amount ……………     R 80.00

 

                                                If your interest is R 20 for the next month, this interest  is

                                                added onto your unpaid interest amount and you are back to the

                                                outstanding amount of R 200 i.e. your debt will never be repaid

                                                because you are  only paying off unpaid interest.

                                                 

however:-

 

If it is found that the in duplum rule applied to your account and the moneylender did not stopped interest when the unpaid interest and unpaid capital was equal, you can exspect a a good return from the moneylender - you might, as I found in many of the cases I investigated  on behalf of clients,

that your loan account has been paid up.

 

Please note that the in duplum rule stops at simple summons and starts again after judgment is

obtained.

 

It is my personal opinion that hundreds of thousands of borrowers with loans and microloans

in South Africa are overcharged simply because banks and micro lenders conveniently ignore the

rule.

 

Please read more about the in duplum rule on the Index page 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial tip for week 30 December 2013

Annemari van Deventer - Pretoria

Question:- What fees are a bank allowed to charge me on my loan account?

Answer:- Section 102 of the National credit Act determines what the following fees and costs

   can be charged on a money lending transaction as follows:-

         a) An ignition fee as contemplated in section 101(1)(b), if the consumer has been

              offered and declined the  option of paying the fee separately.

         b)  Monthly admin fee

         c) the cost of an extended warranty agreement

         d) delivery, installation and initial fuelling charges                 

         e) connection fees, levies or charges

          f) taxes,  license or registration fees

          g) subject to section 106, the premium of any credit insurance payable in respect of

               that credit Agreement.

 

          All other charges on you account except monthly interest charges are therefore not recoverable.