Lewis is a furniture and appliance retailer that sells largely on credit. What it offers is usually not a cash loan but an instalment sale agreement: the goods are delivered, you pay them off over an agreed term, and the retailer retains an interest in them until the last payment is made.
That distinction is the most useful thing to understand before signing. The advertised monthly figure is not the price of the goods, and the extras attached to a retail credit agreement often add substantially to what you repay.
Eligibility Requirements at a Glance
The entry criteria are the standard ones for regulated credit.
- 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 a contactable employer, a working cellphone number and a verifiable address
Income and Affordability Requirements
Retail credit is credit, and the affordability assessment applies exactly as it would at a bank.
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.
Work out the total, not the instalment. Ask the salesperson for the cash price of the goods and the total amount you will repay under the agreement, side by side. The difference is the cost of the credit, and on long retail terms it can approach or exceed the cash price itself.
Ask separately what each add-on costs and whether it is optional. Retail credit agreements commonly include delivery, an initiation fee, a monthly service fee, credit life insurance, and sometimes extended warranties or maintenance cover. Some are required by the agreement; others are sold alongside it and can be declined.
Credit and Financial Requirements
A credit bureau check forms part of every application 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.
Because it is an instalment sale, the goods stand as security. Falling behind can lead to repossession following the process the National Credit Act prescribes. Contact the retailer before you miss a payment rather than after — arrangements are usually possible if you act early.
Credit life insurance is standard on this kind of agreement and settles the balance on death, permanent disability or retrenchment. You may substitute your own policy of equivalent cover; ask for the premium quoted separately so you can compare rather than accepting it bundled.
Consider lay-by instead. Paying towards goods before collecting them costs nothing in interest, creates no credit record entry and puts nothing at risk. If you can wait for the item, waiting is almost always cheaper.
Documents and Verification Required
Take everything to the store on the first visit.
- South African ID document or smart card
- Latest payslip, or the latest three where income varies
- Latest three months’ bank statements showing income deposits
- Proof of residence not older than three months
- Employer contact details for verification
- Exact banking details for the debit order mandate
How to Apply and Improve Approval Readiness
Apply in store, where documents are verified and the agreement is signed. Read the pre-agreement quotation before signing — you are entitled to it, and it sets out the total cost.
- Ask for the cash price and the total repayable side by side
- Ask which add-ons are optional and decline the ones you do not want
- Compare against lay-by, or against buying the same item elsewhere for cash
- Take the shortest term you can afford — long retail terms are where the cost accumulates
- Approve the DebiCheck mandate through your own banking channel only
- Keep your copy of the agreement and the pre-agreement quotation
Frequently Asked Questions
Is retail credit a loan?
Usually it is an instalment sale for specific goods rather than a cash advance. The goods secure the agreement until it is paid off.
Why is the total so much more than the price?
Interest, an initiation fee, monthly service fees, credit life insurance and any optional cover all add to the cash price. Ask for both figures before signing.
Can the goods be repossessed?
Yes, if you default, following the process set out in the National Credit Act. Contact the retailer before missing a payment.
Is credit life insurance compulsory?
It is standard on this kind of agreement, but you may substitute your own policy of equivalent cover. Ask for the premium separately.
Prices, terms, fees and optional covers are set by the retailer and change. Ask for the pre-agreement quotation and the total cost of credit in writing before signing anything.