What a personal loan really costs in South Africa (2026/27)
Figures for the 2026/27 tax year. Prime rate checked 2 October 2026; tax tables and fees checked 30 September 2026. By AfroTech.
A personal loan costs far more than its interest rate suggests, once fees and the length of the loan are added in. Here's what the law allows lenders to charge, and what a R 50 000 loan really costs.
What lenders may charge
- Interest: at most the Reserve Bank's repo rate plus 21%, now 28,25% a year for unsecured loans.
- Initiation fee: at most R 1 207,50 including VAT, usually added to the loan.
- Service fee: at most R 69,00 a month including VAT.
- Credit life insurance may be added, and must be capped at the amount the law allows.
What a R 50 000 loan costs over 3 years
| Interest rate | Monthly repayment | Total repaid | Cost of borrowing |
|---|---|---|---|
| 18% | R 1 920 | R 69 130 | R 19 130 |
| 22% | R 2 025 | R 72 887 | R 22 887 |
| 26% | R 2 132 | R 76 759 | R 26 759 |
| 28,25% (maximum) | R 2 194 | R 78 986 | R 28 986 |
Including the initiation fee (added to the loan) and the monthly service fee. Excluding credit life insurance.
A longer term costs much more
At 24%, repaying R 50 000 over 2 years costs R 2 776 a month and R 16 634 in total interest and fees. Over 6 years the repayment drops to R 1 417, but the cost rises to R 52 033, more than the amount you borrowed.
Cheaper ways to borrow
- Your bond's access facility, if you've paid extra into your home loan: usually charged at your bond rate, around prime (10,75%).
- Saving first for planned purchases, even for a few months, reduces how much you borrow.
- If you're struggling with existing debt, a registered debt counsellor can negotiate lower repayments under the National Credit Act.
Try it with your own numbers. The ZARWise calculator uses the same figures as this page.
Work out your loan repayment