Over-indebtedness is often a disastrous consequence of the high cost of credit. Levenstein summarizes this fact:  The respondent also argues that the amounts relevant to the AoD must be taken into account for the applicant`s previous loans to the respondent. In his affidavit, the respondent refers to PAG 1 (R143,000.00) and PAG 2 (R344,000.00), which were deferred and remunerated. Contrary to the applicant`s contention, the respondents argue that these amounts must be taken into account in the amounts involved, by incriminating themselves in sections 40 (1) and 40(2)a) of the NCA, which provide that the overall debt of the credit contracts must be taken into account. The law does not treat a number of other agreements as credit contracts, including creditworthy offices, that are required to protect the confidentiality of consumer credit information they hold or report. Credit providers must also offer consumers the opportunity to be excluded or broadcast from telemarketing campaigns, marketing or customer lists, and to disseminate emails or TEXT messages en masse. In all credit contract proceedings, a court may declare a credit contract unwise, in which case the court may place an order for bank loans, credit card accounts or cheques under the “credit facility” category. The maximum interest rate is also linked to the SARB Bank Repurchase Rate and is currently 29.8 per cent per annum. The new credit limits have a negative impact on small loans. The smaller the credit, the more expensive it is. A one-month R500 loan costs about as much as the typical thirty percent per month that is calculated before the law. Small credits will be even more expensive.
An R200 loan costs 46 per cent per month (552 per cent per year), more than nine times the maximum interest rates of five per cent per month. A much larger number of applications for default judgments on credit contracts must now be referred to a judge instead of being dealt with by the court administrator. This will significantly increase the workload of judges and could result in much longer debt enforcement procedures, which could lead to frustration among credit providers. Note: The above agreements are not considered illegal when the consumer induces the credit provider to believe that he or she is entitled by withholding or concealing the actual facts. In this document, credit is referred to as a “double-edged sword” because power is “significantly unbalanced” due to poor level of consumer education and knowledge of consumer rights due to poor levels of consumer education and the inability of consumers to enforce these rights through negotiation or legal action: credit cannot therefore be considered a basic universal service to which access to water is , health care and electricity should be expanded, as should access to water. , health care and electricity. There is a greater need to reconcile access to credit with the protection of consumers, especially vulnerable people. “Development credit contracts” are credit contracts for the development of a small business, an education loan or a loan for the construction of low-cost housing. The maximum interest rate is 38.8% per year.  It should be noted that paragraphs 1 to 4 of the AoD provide for the three deferred payments from the date of signing, with the collection of interest and the payment of certain taxes in accordance with clause 10 for the recovery of all fees, charges and payments charged by the lawyers mandated by the applicant, including the collection commission.
The AoD would thus be included in sections 8 (1) and 8 (4) of the NCA as a loan agreement.  Finally, the respondent argues that the agreements are illegal within the meaning of the NCA and that, since the applicant is not registered as a lender, section 89 (5) of the NCA is applicable.