How does the in Duplum rule work?
The in duplum rule has been part of South African law for more than 100 years – translated, in duplum means ‘double the amount’. This common law rule provides that interest on a debt will cease to run where the total amount of arrear interest has accrued to an amount equal to the outstanding principal indebtedness.
What do the common law in Duplum rule and the statutory in Duplum rule have in common?
The common law interpretation is that interest on a debt stops accruing once it has reached an amount equal to the outstanding debt. The statutory in duplum rule limits all interest and other payments on debt to double the amount of the original debt — when someone is in default.
How is mora interest calculated?
The rate at which mora interest is charged is determined by the Minister of Justice from time to time, and currently stands at 7% per annum (as of 19 February 2021). Due to mora interest’s position as a representative of damages the rate at which it is charged cannot be determined by agreement.
Can you charge interest on interest in South Africa?
Bottom line. You can’t be charged more in interest than your original debt. If other charges are added to the interest, you still can’t be charged more than double the original amount borrowed. But the banks don’t agree and have in many cases added legal fees after that amount, and that is now being challenged in court …
Can interest be more than principal?
interest can not be more than principal amount.
What is the maximum rate of interest allowed?
Every state has very specific limits on the amount of interest that may be charged on consumer contracts, ranging anywhere from 5 to 15 percent. But because parties may always agree to interest rates that are above the legal limit, most consumer contracts include interest rates that are above that limit.
What is maximum interest rate allowed by law?
48% per annum
The maximum that lenders may charge under a UCCC credit contract for interest, fees and charges will be 48% per annum, following an amendment to the Consumer Credit Act in NSW and ACT.
Is mora interest simple or compounded?
It is clear from the reasoning, and the facts in these two matters, that mora interest can be charged on interest which is due and payable. The interest which accrues on the unpaid tranches is itself mora interest. There is no provision for compounding interest on any mora interest which might accrue.
What is meant by mora in law?
MORA, In civil law. This term, in mora, is used to denote that a party to a contract, who is obliged to do anything, has neglected to perform it, and is in default.
Is 40% interest rate legal?
CALIFORNIA: The legal rate of interest is 10% for consumers; the general usury limit for non-consumers is more than 5% greater than the Federal Reserve Bank of San Francisco’s rate.
Can you pay off principal before interest?
You can apply extra payments directly to the principal balance of your mortgage. Making additional principal paymentsreduces the amount of money you’ll pay interest on – before it can accrue. This can knock years off your mortgage term and save you thousands of dollars.
What is the meaning of the in duplum rule?
The judgment specifically deals with the in duplum rule and its applicability. The in duplum rule as developed in our law, provides inter alia that interest due in respect of certain debts ceases to run when it reaches the amount of the unpaid capital sum.
Is the in duplum rule confined to arrear interest only?
It referred particularly to the judgment in the case of Sanlam Life Insurance Limited v South African Breweries Limited 2000 (2) SA 647 (W), where it was stated that the in duplum rule is confined to arrear interest only.
When is the in duplum rule suspended in South Africa?
In these circumstances, the Supreme Court of Appeal (in Standard Bank of South Africa Ltd v Orneate Investments (Pty) Ltd (In Liquidation) 1998 (1) SA 811), has held that the in duplum rule would be suspended during the litigation. But once judgment has been granted, interest may run until it reaches the double of the capital amount.