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Rates, fees and what you repay

On a small short-term loan the interest rate is rarely the biggest number. The initiation fee, the monthly service fee and the VAT on both frequently cost more than the interest does, which is why a page that compares only rates can be entirely accurate and still mislead you.

Rates & fees 12

Loan interest rates in South AfricaUnderstanding South African interest rate capsInitiation and service fees explainedUnderstanding South African credit feesTotal cost of creditUnderstanding and comparing total cost of creditVAT on loan feesHow VAT applies to South African creditCredit life insurance on a loanUnderstanding credit life insuranceSettling a loan earlySettling a credit agreement before termWhat happens if you pay lateConsequences of missing a repaymentThe National Credit Act rate capsThe statutory maximums by credit typeHow repayment schedules workUnderstanding a repayment scheduleInterest versus fees: which costs moreWhich component dominates the costDefault fees and collection costsCharges that apply after a defaultHow to compare two loan quotesComparing competing credit quotes

Four components, one figure that matters

Every South African credit agreement breaks into the same parts: the amount you borrowed, the interest on it, the initiation fee, the monthly service fee, and VAT. Added together above the principal they make the total cost of credit — the single figure every pre-agreement quote is legally required to show you.

Compare that figure and nothing else. Two quotes with identical advertised rates can differ substantially on it, and a quote that will not state it is not a quote you can compare.

Related

Total cost of credit calculatorLoan interest rates in South AfricaTypes of short-term loanApplying for credit

Sources and last checked

Page last checked 10 August 2026. Statutory caps and lender terms change — confirm anything you intend to rely on with the provider or the National Credit Regulator. Found something wrong? Tell us and we will correct it.