The most a month, by amount and term
R20 000: at most R1 160.32 a month over 24 months (R29 271.17 in total), R889.98 over 36 months (R33 570.61), R685.74 over 60 months (R42 891.68) and R639.30 over 72 months (R47 885.31).
R50 000: at most R2 810.80 a month over 24 months (R68 882.67), R2 134.94 over 36 months (R78 389.28), R1 624.34 over 60 months (R99 207.95) and R1 508.26 over 72 months (R110 450.01).
R75 000: at most R4 186.20 a month over 24 months (R101 892.25), R3 172.41 over 36 months (R115 738.17), R2 406.51 over 60 months (R146 138.17) and R2 232.39 over 72 months (R162 587.27).
The figures assume the highest rate the National Credit Act allows on unsecured credit — the repo rate plus 21% a year, 28.25% while the repo rate is 7.25% — the maximum initiation fee and a service fee of R60 a month, with VAT on the fees. Any other amount and term: the loan cost calculator.
A longer term: lower instalment, higher total
Stretching R20 000 from two years to six lowers the most you pay a month from R1 160.32 to R639.30, but raises the total from R29 271.17 to R47 885.31. Interest runs for longer and the service fee is charged every month. Choose the shortest term whose instalment you can carry in your tightest month.
You may settle a loan early. The National Credit Act lets you repay the balance at any time; on a loan of this size you pay the balance with the interest and fees up to the settlement date and no early-settlement penalty — so a longer term with early repayments when you can afford them is a reasonable plan.
What decides your rate
Banks and lenders price each loan by risk: your credit record, your income and how much of it already goes to other debt. A strong record can earn a rate well below the cap; a low credit score usually means a rate closer to it, a smaller amount or a decline. The rates the five big banks published are in our guide to bank personal loan rates.
Credit life insurance adds to the monthly cost. A lender may require cover for the balance, but the law caps the premium and lets you take the cover from another insurer, so ask for the instalment with and without it before you compare offers.
Seven years and more
Few unsecured personal loans run beyond six years (72 months), and the cost of the longest terms is high: at the legal maximum the interest and fees on a six-year loan come close to the amount borrowed. If you need more than R75 000 or longer than six years, a secured loan, such as a further advance on a home loan, is usually far cheaper.
Before you sign, read the pre-agreement quotation: it shows the rate, the fees, any credit life insurance and the total you will repay. Compare that total across offers, and see our page on personal loans for how lenders decide.