Guidelines on Creditworthiness Assessment

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Should you wish to apply for credit here are a few guidelines on creditworthiness assessment to take note of. 

Credit providers can use either payslips or bank statements to calculate the consumers’ discretionary incomes. 

Credit providers are required to: 
  • Conduct an affordability assessment and calculate the consumer’s discretionary income;
  • Take practical steps to ensure that a consumer can pay the installments; and
  • Use the minimum expense norms table broken down by monthly gross income when calculating the existing financial obligations of consumers.
The gross income of a consumer who’s employed in the formal sector of the economy for this category, credit providers can:  
  • Determine source of income by referencing the consumer’s payslip.
  • Or if the consumer has a bank account into which the consumer’s salary is deposited, the consumer’s net income can be established with reference to the consumer’s bank statement. 
In the case where the consumer has been employed for less than three months the guidelines state:  
  • That the credit provider should obtain the consumer’s latest payslip at the time of the credit application. 
  • Or a letter of employment confirmation from the employer detailing the salary and its frequency of payment
  • Or a bank statement showing the latest salary deposit.

For consumers who are self-employed, informally employed or consumers that have income other than from formal employment and which isn’t evidenced by payslips or bank statements.  

They’ll no longer be any need to collect any particular form of documentation proving income when applying for credit. This according to published new guidelines for assessing gross and discretionary incomes when applying for credit in South Africa.

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