The legal maximum by term
Repaid within six months, R5 000 is short-term credit. Interest may be at most 5% a month on your first such loan in a calendar year, plus a capped initiation fee and a service fee of at most R60 a month, with VAT on the fees. Repaid in one payment, the most it may cost is R965.33 after 30 days, R1 280.90 after 60 days, R1 596.48 after 90 days and R2 543.20 after six months.
Repaid over longer, R5 000 is an unsecured loan, with interest capped at the repo rate plus 21% a year — 28.25% a year while the repo rate is 7.25%. Over 12 months the most is R543.14 a month, R7 275.45 in total; over 24 months R335.08 a month, R8 907.67 in total.
Why a year can cost less than six months
The two kinds of credit have different caps. 5% a month on short-term credit is far more than the yearly cap on an unsecured loan, so at the legal maximum R5 000 over 12 months (R2 275.45) costs less in total than R5 000 over six months (R2 543.20). Few lenders offer R5 000 over a year, though: most loans of this size are short-term, and many lenders limit a first loan to R4 000 or R5 000.
These are ceilings, not prices. Many offers cost less, and the pre-agreement quotation the lender must give you shows the exact total in rand. Work out the maximum for your own amount and term with the loan cost calculator.
What lenders ask for
An SA ID, your latest three months' bank statements and, with most lenders, a payslip. The lender checks your credit record and that the repayment fits your income after your living costs; that decides whether you are offered R5 000 or less. Our page on small loans compares the amounts and terms of the registered lenders we list.
If you are offered less than R5 000, that is the affordability check at work, not a mistake: the lender has worked out what your income can repay after your other debts and living costs. Repaying a first loan on time is the usual way to a higher limit with the same lender; applying to several lenders the same week usually has the opposite effect.
Before you borrow R5 000
Check the lender on the National Credit Regulator's register, read the total you will repay, and make sure the debit order runs after your salary lands. Apply once: every application leaves an enquiry on your credit record.
Never pay a fee before the loan is paid out. A registered lender adds its initiation fee to the loan when the agreement is concluded; a request for money upfront is the sign of a scam.
If R5 000 is more than one salary can carry, a loan over two or three months, or over a year with a personal loan, keeps each repayment smaller — at a higher total for the longer short-term loans. Compare both before you choose.