Is Nedbank guilty of reckless lending? A man's fight over a R484,000 car loan
A man who bought his car while he was employed on a short-term contract is accusing Motor Finance Corporation, a division of Nedbank Limited, for reckless lending.
Milfort Maphuti Moloto bought a Hyundai H100 2.6D in March 2020 through Nedbank while he was employed on a 10-month contract.
The collectable loan was over R484,000 and it was repayable in instalments over sixty months and had a balloon payment, which became payable immediately after the sixty months.
The crux of Moloto's argument lies in the assertion that his financial situation at the time of the loan approval was not adequately considered by the bank.
In his application, at the National Consumer Tribunal (NCT), Moloto alleged that since the overall collectable amount was over R484,000 and his total earnings for the 10 months were over R530,000; this left him with a net difference of at least R46,118.
He further argued that the loan agreement was payable over seven years with a residual or balloon payment. From this, he said, it can be concluded that the granting of the loan amounted to reckless lending, particularly given his limited contractual employment duration.
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