Section 16: Penalty on default of payment
consolidated text (as at 2016, amended since). juris shows the text as it was consolidated; it does not confirm that this is the law in force today.
16. Penalty on default of payment
(1) A credit agreement may provide for a penalty by way of interest
where a borrower is in default of payment of one or more instalments in respect of a loan.
(2) Any penalty by way of interest under subsection (1) shall—
(a) be at a rate not exceeding 5 per cent per annum; and
(b) be calculated on the default instalment excluding the interest
payable thereon and any penalty by way of interest under this
section.
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Questions this section answers
- Is there a cap on the penalty interest my lender can charge if I miss a payment?