Loans Against Jewellery and Watches
What happens if I cannot repay the loan?
The short answer
If you cannot repay a secured loan, the steps that follow are set out in your credit agreement and in the National Credit Act. The agreement explains what notice you receive and when the pledged asset may be sold to recover what is owed. Contacting the credit provider early, ideally before a payment is missed, usually leaves more options open, such as settling part of the debt or agreeing new terms.
What default means
You are in default when you do not pay an amount by the date the credit agreement requires, or do not settle the loan by the end of its term. Default can lead to additional charges permitted by the National Credit Act, such as default administration charges and collection costs, and may be reported to credit bureaus.How the process generally works
The Act sets out specific rules for default and for realising security. In general, a credit provider must draw the default to your attention in writing before enforcing the agreement through legal proceedings, and that notice may propose that you approach a debt counsellor, an alternative dispute resolution agent, a consumer court or an ombud. Where an asset is held as security, the agreement sets out when and how it may be sold, how the proceeds are applied to the debt and what happens to any surplus or shortfall. The exact steps depend on how the agreement is structured and the law that applies to it.What depends on Knox policy
Knox's default steps, notice periods and disposal process are set out in its credit agreement. If a payment is missed, Knox sends a written default notice giving you time to pay. If the arrears are not paid within that period, the loan ends and Knox may sell the pledged goods without a court order. The proceeds settle what you owe: any surplus is paid back to you, and you are not liable for any shortfall. Default interest is charged at the same rate as the loan. Whether Knox can extend a loan or agree new terms is a matter of its credit policy. There is no automatic right to extend a loan. Any change to the term must be agreed and recorded in writing.What you can do
- Contact Knox as soon as you think a payment may be missed.
- Ask for a settlement figure, since you can settle early at any time. You can settle early at any time without penalty. Ask Knox for a settlement figure, which is valid for 24 hours; you can also make extra payments at any time without notice.
- Ask whether part payment, an extension or another arrangement is possible, and get any agreement in writing.
- If you are struggling with several debts, consider speaking to a registered debt counsellor.
Complaints and disputes
If you believe the default process has not been followed correctly, raise it with Knox first. Complaints can be sent in writing to compliance@knox.co.za or raised by calling 011 646 1919, and Knox asks that you contact it first so it can try to resolve the matter. If the complaint is not resolved, you may be able to approach an ombud or the National Credit Regulator. For credit agreements you may contact the National Credit Regulator (0860 627 627 / 011 554 2700, info@ncr.org.za, www.ncr.org.za) or the National Consumer Tribunal (012 683 8140 / 012 742 9900, www.thenct.org.za). Concerns about personal information can be raised with the Information Regulator (010 023 5200, enquiries@inforegulator.org.za).How Knox handles this
Knox sets out the default steps, including notices, charges and the circumstances in which a pledged asset may be sold, in the credit agreement before you sign. If you contact Knox before or after a missed payment, Knox can explain the current settlement amount and the options available under its credit policy. Any arrangement that changes the agreement is confirmed in writing before it takes effect.
Ready for the next step?
Speak to the Knox team about your situation. They will confirm current pricing, availability and requirements before you decide.
