The in-duplum rule is a legal principle that regulates the accumulation of interest on a debt. According to this principle, the accrual of interest on a debt will halt when the total accumulated interest reaches the same amount as the outstanding principal debt. This rule originated from the legal case Standard Bank of SA Ltd vs. Oneate Investment (Pty) Ltd 1995 (4) SA 510.

A fundamental principle established within our legal framework states that interest, regardless of whether it is simple or compound interest, stops accumulating once the accrued interest matches the outstanding principal amount. This rule applies universally, including debts that come from financial loans or agreements that involve the payment of a principal amount together with stipulated interest at a specified rate.

In South Africa, this rule exists both under common law and in statute and was specifically was codified in the National Credit Act to protect consumers.

The principle exclusively applies to "arrear" interest, i.e. interest that accumulates after the debtor fails to fulfil their obligations. Once the accrued interest equals the principal amount, the accumulation of further interest must cease. Consequently, when the sum of interest accrued post-default equal with the remaining principal, interest accrual must terminate.

This regulation applies in instances involving loans, overdrafts, and all other agreements in which a principal amount can be specified, and where interest can be imposed upon it at a quantifiable rate.

Further, this rule applies solely to non-performing loans. A loan becomes "non-performing" when the debtor fails to settle their accounts.

For any debt issues, either as the creditor or debtor, please contact one of our professionals.

Email: info@thomsonwilks.co.za

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