Every charge a South African lender may legally add — interest caps, initiation fees, service fees and credit life — with worked rand examples.
A South African loan has up to four cost components, all capped by the National Credit Act: interest (5%/month short-term; repo+21%/year personal), a once-off initiation fee (max R1,207.50 incl VAT), a monthly service fee (max R69), and on personal loans credit life insurance (max R4.50 per R1,000 owed). Example: R4,000 over 30 days totals ±R4,734.
The NCA caps interest by credit type. The two you'll meet most often:
| Credit type | Maximum interest |
|---|---|
| Short-term credit (≤R8,000, ≤6 months) | 5%/month first loan per calendar year; 3%/month on repeats |
| Unsecured personal loan | Repo rate + 21% per year (±28–29% p.a. today) |
| Credit card / facility | Repo + 14% per year |
| Mortgage | Repo + 12% per year |
R165 + 10% of the amount above R1,000, capped at R1,050 excl VAT. On a R4,000 loan that's R165 + R300 = R465. On anything from ±R9,850 up, you hit the cap: R1,207.50 incl VAT.
Maximum R69 per month incl VAT, regardless of loan size. This is why many small loans cost proportionally more: R69/month on a R1,000 loan is a much bigger slice than on R100,000 — and why fewer months means real savings.
Capped at R4.50 per R1,000 of outstanding balance per month on unsecured credit. It shrinks as you repay. You may substitute your own qualifying policy instead of the lender's.
| Interest (5% × 1 month) | R200 |
| Initiation fee (R165 + 10% × R3,000) | R465 |
| Service fee (1 month) | R69 |
| Total repayable | R4,734 (cost of credit: R734) |
| Initiation fee (capped, incl VAT) | R1,207.50 |
| Interest over 48 months | ±R33,000 |
| Service fees (48 × R69) | R3,312 |
| Credit life (declining balance) | ±R6,200 |
| Total repayable | ±R93,700 (±R1,950/month) |
Run your own numbers in our free calculator — and remember the golden rule: compare total repayable, not advertised rates.
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