How loan interest and fees actually work in South Africa
Every registered credit provider in SA has to follow the same framework — set out in the National Credit Act. This page explains, in plain language, what you'll actually be charged.
The three main charges
- Interest. A percentage of the outstanding balance, charged monthly. Capped by the NCA depending on loan type.
- Initiation fee. A one-off fee for setting up the loan, added at the start. Capped by the NCA.
- Monthly service fee. A small monthly admin fee, capped by the NCA (currently R69 including VAT for most credit agreements).
The exact numbers change from time to time — always check the credit agreement you're offered before signing.
What APR really means
APR (annual percentage rate) is the yearly cost of borrowing expressed as a percentage. It's a useful comparison number, but it doesn't always include every fee. When comparing offers, always look at the total amount repayable as well as the APR.
Different loan types, different caps
- Unsecured credit (most personal loans): interest capped based on the SA Reserve Bank repo rate.
- Short-term credit (up to R8,000 for up to 6 months): higher interest caps, plus fee caps.
- Developmental credit and mortgages: different rules again.
What credit providers can't do
- Charge more interest or fees than the NCA allows
- Charge fees before the loan is paid out
- Approve a loan you can't afford — every provider must do an affordability check first
Lumo Loans doesn't set interest rates or fees. Any credit provider you're matched with will disclose the full cost of credit before you sign anything.
Ready to see your options?
Answer a few quick questions and we'll show which of our registered credit providers may be a fit. It takes about two minutes and won't affect your credit score.
Lumo Loans is a loan enquiry and referral service. We are not a credit provider. Any loan is subject to the credit provider's own criteria and affordability assessment, in line with the National Credit Act.