PEP stores are associated with several quite different things people call “credit”, and confusing them leads to the wrong expectations. A cash loan taken through a PEP counter is a Capfin product. Lay-by is not credit at all. A store account is a different arrangement again.
Knowing which one you are dealing with tells you what you will be asked for, what it costs, and what happens if you cannot pay.
Eligibility Requirements at a Glance
For a cash loan submitted at a PEP counter, the criteria are the credit provider’s.
- Be 18 years or older
- Hold a valid South African ID document or smart card
- Have a regular, verifiable income paid into a bank account in your own name
- Hold a bank account able to carry an authenticated debit order
- Not be under debt review, sequestration or administration
- Have your own cellphone for one-time PIN verification
Income and Affordability Requirements
A cash loan is credit, so the affordability assessment applies in full.
The Act requires an affordability assessment before credit is granted: the provider must verify gross income, subtract statutory deductions such as PAYE and UIF, subtract the minimum living expenses prescribed in the affordability assessment regulations, and subtract existing monthly debt repayments. Lending without that assessment is reckless lending and is prohibited.
Lay-by is not credit. You pay towards goods in instalments and collect them once they are paid off. Nothing is advanced to you, so there is no interest, no credit check and no credit agreement — and no listing on your credit record either way. The Consumer Protection Act governs lay-by arrangements, including what happens to your money if you cancel or if the supplier fails to deliver. Ask for the cancellation terms in writing before you start.
Because lay-by costs nothing in interest, it is almost always cheaper than borrowing to buy the same item. If you can wait for the goods, wait.
Credit and Financial Requirements
For the cash loan, a credit bureau check forms part of the assessment and repayment behaviour is reported back to the bureaux.
The agreement is regulated by the National Credit Act 34 of 2005 and the provider must be registered with the National Credit Regulator (NCR). Verify registration free of charge at ncr.org.za before you sign.
A store account is a revolving credit facility. It is credit, it is assessed for affordability, it appears on your credit record, and unused available credit on it counts against you when you apply for anything else. Interest applies to balances carried beyond the interest-free period, if there is one.
So the three routes differ sharply in consequence. Lay-by risks nothing but delays the goods. A store account is convenient and affects your credit record. A cash loan gives you money now and is the most expensive of the three.
Documents and Verification Required
For a cash loan submitted at a store counter, take everything on the first visit.
- South African ID document or smart card
- Latest three complete consecutive months’ bank statements
- Latest payslip, or the latest three where income varies
- Proof of residence, where requested
- Your own cellphone for verification
- Exact banking details — account number, branch code and account type
How to Apply and Improve Approval Readiness
Decide which of the three you actually need before going in, because they are arranged differently and the staff at the counter will do what you ask for.
- If you can wait for the goods, use lay-by — it costs nothing in interest
- Ask for lay-by cancellation terms in writing before paying anything
- For a cash loan, take complete original bank statements, not screenshots
- Approve any DebiCheck mandate through your own banking app only
- Ask for the total repayable amount before accepting any credit
- Verify the credit provider’s NCR registration at ncr.org.za
Frequently Asked Questions
Does PEP lend the money itself?
No. Cash loans available through PEP counters are provided by Capfin, a registered credit provider. The store is the submission point.
Is lay-by a loan?
No. You pay towards goods before collecting them. There is no credit, no interest and no credit record entry. The Consumer Protection Act governs the arrangement.
What happens to my money if I cancel a lay-by?
The Consumer Protection Act sets out how cancellations are handled, and the supplier’s terms apply within that. Get the terms in writing before you start paying.
Which option is cheapest?
Lay-by, because there is no interest. A cash loan is the most expensive of the three.
Loan criteria, lay-by terms and account conditions are set by the provider or retailer and change. Confirm current terms in store and with the credit provider before committing.