A guide to verifying loan providers in South Africa and how to report illegal ones.
A lot of people get scammed and defrauded by illegal loan lenders operating under no-credit regulations.
So we’ve put together this article to help you take caution with the necessary steps to verify a loan provider.
To verify a loan provider in South Africa to ensure that they are legitimate and licensed to operate, you can follow these steps:
Check the Registration with the National Credit Regulator (NCR)
Verify the NCR Registration
All legal loan providers in South Africa are required to be registered with the National Credit Regulator (NCR).
You can check if the loan provider is registered by visiting the NCR’s official website or contacting them directly.
If it’s not listed on the NCR website, it’s a definite NO-GO!
Check for the NCRCP Number
A registered credit provider should have a unique NCRCP (National Credit Regulator Certification of Registration) number.
This should be prominently displayed on the provider’s website, documentation, and premises.
Investigate the Loan Provider’s Reputation
- Online Reviews and Testimonials: Search for online reviews or testimonials regarding the provider. While some negative reviews are to be expected, a pattern of complaints could be a red flag.
- Ask for Recommendations: If possible, ask friends, family, or colleagues for recommendations of loan providers they have used and had good experiences with.
Assess the Loan Offer
- Transparent Fees and Rates: A legitimate loan provider should clearly disclose all fees, interest rates, and terms associated with the loan. Be wary of providers that are not transparent about their fees.
- No Upfront Fees: Be cautious if the loan provider asks for upfront fees before processing your loan, as this is a common tactic used by scams.
- No Credit Checks: Any responsible lender registered with the NCR must conduct the necessary credit and affordability checks of loan applicants. This will ensure the borrower will afford to repay the loan amount, even if it’s a secured loan.
Report Suspicious Activity
If you suspect that a loan provider is operating a scam or fraudulent activity, report it to the relevant authorities in South Africa, including the NCR and the South African Police Service (SAPS).
Seek Legal Advice
If you’re still in doubt, consider seeking legal advice or consulting with a financial advisor to ensure that you are making an informed decision.
Remember, it’s always best to conduct thorough research before entering into any financial agreement with a loan provider.