Reckless lending can lead to being over indebted.
Reckless lending is defined as when a creditor extends consumer credit despite failing to complete a thorough credit analysis as required by the National Credit Act (NCA).
The proposed credit agreement is deemed reckless lending if the consumer is unaware of the risks, expenses, and obligations it creates. A credit arrangement is deemed reckless lending if the credit provider undertakes an evaluation and determines that signing into the proposed credit agreement would result in the potential consumer becoming over-indebted but yet engages into the agreement with the consumer.
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