How to work out personal loan repayments in South Africa (with rand examples)

How is a personal loan repayment worked out?

Most personal loans in South Africa use an annuity: the same instalment every month, made up of interest on what you still owe plus a slice of the capital. In the early months most of the instalment is interest. Towards the end it is mostly capital, which is why paying a loan off early saves more than the headline numbers suggest.

The formula looks scary but each part is simple. Instalment = P x i / (1 - (1 + i)^-n), where P is the amount you borrow, i is the monthly interest rate (the yearly rate divided by 12) and n is the number of monthly payments. A loan calculator does exactly this sum. You can check it on your own cellphone calculator once, then let the tool do the work.

That instalment covers interest and capital only. The initiation fee, the monthly service fee and any credit life premium are separate lines, so the amount debited from your account is usually higher than the calculator's first answer. The next sections show how much higher.

What is included in a personal loan repayment under the National Credit Act?

Up to four charges can sit in what you pay: interest, a once-off initiation fee, a monthly service fee and credit life insurance if you take it. Each has a ceiling for an unsecured loan, and a lender may charge less but never more.

Interest on an unsecured credit agreement is capped at the repo rate plus 21 percentage points a year. With the repo rate at 7.25% since the Reserve Bank's September 2026 decision, that is 28.25%, which matches the "NCA max" that FNB quotes on its personal loan page. The initiation fee follows Table B of Regulation 42: R165 plus 10% of the amount above R1,000, capped at R1,050 before VAT. With VAT that cap is R1,207.50, the figure FNB lists as its once-off initiation fee.

The monthly service fee is limited to R60 before VAT under Regulation 44, which is R69 with VAT and again the figure on FNB's page. Credit life premiums are capped by the credit life insurance regulations at R4.50 per R1,000 of the deferred amount for unsecured loans, according to the National Credit Regulator's media release on the rules. Our guide to credit life insurance explains when it can be required.

What do some rand examples look like?

The table above takes three loan sizes and prices the fees at the legal maximum: an initiation fee of R1,207.50 once, plus R69 every month. All three loans are large enough that the initiation fee sits at that ceiling. Interest rates are chosen as examples inside the 28.25% limit. Your own rate depends on the lender's assessment of you, so use the quote you are given.

Take the R30,000 loan over 36 months. The instalment of R1,114.91 is interest and capital. Add the R69 service fee and the monthly debit becomes R1,183.91. Over 36 months you repay R40,136.67 to the lender for the loan itself, R2,484 in service fees and R1,207.50 in initiation fee, which adds up to R43,828.17 for a R30,000 loan. Some lenders add the initiation fee to the loan balance instead of taking it upfront, which means you pay interest on it too.

The R10,000 loan has the highest rate yet the smallest bill: R3,382.65 above the capital. The R80,000 loan has the lowest rate but five years of interest and service fees add R44,639.86. Length matters as much as the rate, so ask for a quote at two terms.

How much does the instalment change when prime moves by 0.25 percentage points?

On a R100,000 loan over 60 months, a quarter-point rise in a variable rate adds about R13.30 to the monthly instalment. At 16.00% the instalment is R2,431.81 and at 16.25% it is R2,445.11. Across the 60 months that is roughly R798 more in total.

Only a loan with a floating rate follows prime. FNB calls the rate on its personal loan fixed and tailored to the client, so it stays put once agreed. Prime has been 10.75% since 25 September 2026, and the Monetary Policy Committee meets again on 19 November 2026. The prime rate guide keeps the current figures.

Where do I see the total cost of credit before I sign?

It is on the pre-agreement quotation, which section 92 of the National Credit Act obliges the lender to give you before you sign. The quotation has to show the principal debt, the interest rate and other credit costs, and the total cost of the agreement. Ask for it at the branch or in the app and take your time. If you ask within five business days, the provider must offer the same rate or cost or lower.

Picture the R30,000 example. A fair quote would show R30,000 as principal, 20% interest, 36 instalments and a total cost near R43,800 if the fees are at the maximum. If the total printed is far above what your own calculation gives, ask the consultant which line explains the gap. Credit life is the usual answer, and you will see whether it sits inside the instalment.

How can I make sure I can afford the instalment?

Start from your payslip. Net salary, less rent or bond, transport, groceries, school fees and the debit orders already running, leaves a number. The new instalment plus the R69 fee has to fit inside it with a gap for a bad month. Lenders must assess affordability under the National Credit Act, yet they only see what you told them.

If the choice is between a bank loan and short-term credit, the payday loan cost guide shows how the monthly caps work. Check the provider's NCR registration too, and browse profiles in the lender directory.

Can I use the same calculation for other loans?

Yes, a car instalment, a student loan or a debt consolidation loan use the same annuity formula. Only the rate cap differs. Credit facilities such as cards and store accounts are capped at the repo rate plus 14 points, and other credit agreements such as instalment sales at the repo rate plus 17 points, according to Table A of Regulation 42. Mortgages are capped at repo plus 12 points.