Consumers now have to keep in mind the new changes that have been brought by the budget 2015. The interest rate for items bought on credit has come from 19 % to 12 %. However, this does not apply to contracts having been made before the implementation of the measure by the trader.
One of the new measures to be put into force as per the budget 2015 concerns the Annual Percentage Rate (APR). It was announced that the APR will jump from 19 % to 12 %. Consumers can now rejoice – the implementation thereof began yesterday, 1st of April.
The APR is not the only variable having changed. The penalty for delay of payment has also decreased, from 5 % to 2 %. The announcement was made by the Ministry of Industry, Commerce and Consumer Protection, the day before, when a communiqué was issued. Traders are now obligated to display the new rates.
Some have not even waited for the modifications of the Hire Purchase Act to be made. For instance, J Kalachand & Co. Ltd had applied the new measure last Tuesday itself, just the day after the budget was revealed.
What does this imply for consumers? The interest rates having been lowered, they will spend less on items they buy on credit and will thus be able to save a considerable amount of money. However, it is to be noted a consumer having purchased a product on credit before the retailer has applied the measure will still have to pay the 19 % interest until the end of the time for payment even if the trader ultimately implements the changes in the meantime. This is because the consumer is to abide by the conditions of the contract when it was agreed upon, regardless of changes made at a later time.