Exam (elaborations)
COL3704 Exam pack 2024(Questions and answers)
- Course
- COL3704
- Institution
- University Of South Africa
COL3704 Exam pack 2024(Questions and answers) With accurate answers and assurance that they are in the exam.
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COL3704 EXAM PACK2024
QUESTIONS AND
ANSWERS
FOR ASSISTANCE CONTACT
EMAIL:gabrielmusyoka940@gmail.com
, lOMoARcPSD|44660598
COL3704: SELF-ASSESSMENTS
SECTION A – UNIT 1
OUTCOMES
1. Define what a credit agreement is.
A credit agreement is an agreement where there is:
- a deferral of repayment or prepayment
- a fee, charge or interest is levied for a deferred payment or a discount is given when
prepayment is made.
2. Discuss how the National Credit Act regulates certain credit market practice, over-
indebtedness and reckless lending.
The legal rules relating to credit agreements can be found in the National Credit Act 34 of 2005.
The Act prohibits the granting of reckless credit and provides for certain remedies that courts
can grant to consumers who have fallen victim to reckless lending practices.
3. Describe how a credit agreement terminates.
The credit agreement terminates when all the principal, interest and all other indebtedness
have been paid in full.
4. Identify the Act9s regulatory framework.
The National Credit Act 34 of 2005 intends to promote a fair and non-discriminatory
marketplace for access to consumer credit and for that purpose to provide for the general
regulation of consumer credit and improved standards of consumer information; to promote
black economic empowerment and ownership within the consumer credit industry; to prohibit
certain unfair credit and credit-marketing practices; to promote responsible credit granting and
use and for that purpose to prohibit reckless credit granting; to provide for debt re-organisation
in cases of over-indebtedness; to regulate credit information; to provide for registration of
credit bureaux, credit providers and debt counselling services; to establish national norms and
standards relating to consumer credit; to promote a consistent enforcement framework
relating to consumer credit; to establish the National Credit Regulator and the National
Consumer Tribunal; to repeal the Usury Act, 1968, and the Credit Agreements Act, 1980; and to
provide for related incidental matters.
Page 1 of 49
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ACTIVITY 1
Make a list of all the credit agreements that you are currently repaying.
- Loan – Direct Axis
- Bond
- Overdraft
- MTN account
- Water & Lights
- Wifi
- School fees
ACTIVITY 2
Can you think of any other advantages or disadvantages to purchasing on credit. List these
below.
Advantages:
- Instant gratification
- Save on interest and fees
- Manage your cash flow
- Avoid utility deposits
- Better credit card rewards
- Emergency fund backup plan
- Avoid and limit financial fraud
- Purchase and travel protections
- Don't underestimate the power of good credit
Disadvantages:
- Bad habits
- Over commitment / overspending
- Paying high rates of interest
- Credit damage
- Credit card fraud
- Cash advance fees and rates
- Annual fees
- Credit card surcharge
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ACTIVITY 3
Pawn
Discount,
Credit facility Incidental credit,
Installment
CREDIT AGREEMENT Credit transaction Loan
Credit guarantee Morgage
Loan
ACTIVITY 4
1. In each of the following examples, identify the type of credit agreement.
2. In each of the following examples, indicate whether Alvereen will be considered a <consumer=
(in terms of the NCA) by ticking the <yes= OR the <no= columns. You must also give a reason
why you chose that answer.
<Yes= means that you think Alvereen is a consumer.
<No= means that you think Alvereen is not a consumer.
Page 3 of 49
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