These articles are general information and not financial, legal or tax advice. Rates, fees and rules change, so confirm current figures with the lender, the NCR or SARS before you act.
A low monthly instalment can hide a very expensive loan. Under the National Credit Act, lenders must show you the full cost in the credit agreement, so use it to compare offers properly.
What to compare
- Interest rate: fixed or variable, and how it is calculated.
- Initiation fee: a once-off fee to set up the loan.
- Monthly service fee: charged every month for the life of the loan.
- Credit life insurance: check whether it is compulsory and what it adds.
- Loan term: a longer term lowers the instalment but raises the total you pay.
A simple method
- Get written quotes from at least three registered lenders for the same amount and term.
- For each one, multiply the monthly instalment by the number of months.
- Compare the total repayment, not only the monthly figure.
Check the limits
The National Credit Act caps the interest rate, initiation fee and service fee that lenders may charge. The caps are updated from time to time, so check the current figures on the NCR website.
General information only, not financial advice.
Ask every lender for a pre-agreement quote and compare the total cost side by side.