Loans Against Jewellery and Watches
What interest and fees apply to a jewellery or watch loan?
The short answer
The interest, fees and charges on a jewellery or watch loan are set by the credit provider within the limits of the National Credit Act, and must be disclosed in a pre-agreement statement and quotation before you sign. They may include interest, an initiation fee and a monthly service fee. Interest is charged at the fixed rate shown in your quotation, calculated daily and charged monthly. The quote also shows an initiation fee and a monthly service fee. Knox charges interest of 5% per month on a client's first loan. On later loans the rate ranges from 3% to 5% per month, depending on the loan. Compare the total cost of credit over the full term, not only the interest rate.
What the cost of credit is made up of
The National Credit Act limits the kinds of charges a credit provider may levy and sets maximum rates and fees that vary by type of agreement. The main elements you are likely to see are:
- Interest, charged on the outstanding balance at the rate in the agreement
- An initiation fee, for setting up the agreement
- A monthly service fee, for administering the account
- Default administration charges and collection costs, which apply only if payments are missed
Any other cost must be permitted by the Act and disclosed in the quotation.
How the quotation and agreement work
Before you commit, the credit provider must give you a pre-agreement statement and quotation showing the loan amount, the interest rate, each fee, the repayment amount, the term and the total cost of credit. The credit agreement then records these terms. The agreement also explains how often you will receive statements of account, and you can ask for a settlement figure at any time. Knox Precious Metals (Pty) Ltd is a registered credit provider, NCR registration number NCRCP21466.
What depends on Knox policy
Knox sets its own interest rate and fees within the legal limits, and these may change. You can pay the initiation fee upfront or have it added to the loan amount; your choice is recorded in the quotation. The initiation fee is R1 000 (VAT inclusive). Ongoing account charges are also shown in the quotation. A monthly service fee is added to your balance on the dates shown in your quotation. The monthly service fee is R60 (VAT inclusive). Ask Knox to explain any item in the quotation you do not understand. All interest, fees and charges are set out in the pre-agreement quotation before you decide whether to proceed.
What affects your total cost and what to do next
The total you repay depends on how much you borrow, how long the loan runs and whether you settle early or extend. A longer term or an extension generally increases the total cost, while settling early can reduce the interest you pay. 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. Before you sign, compare the total cost of credit with your other options, including not borrowing, and check that the repayments fit your budget.
How Knox handles this
Ready for the next step?
Speak to the Knox team about your situation. They will confirm current pricing, availability and requirements before you decide.
