How to compare the total cost of a South African loan

Two loans with the same headline amount can cost different amounts to repay. The useful comparison is the cash you actually receive, every fee and interest charge, the payment dates and the total payable. A lower monthly instalment can feel easier while extending repayments; a shorter term can make a single payment harder to meet.

Start with a real quotation

Write down the amount requested and the amount that will reach your bank account. Then list the interest, initiation fee, service fee and any other charge shown. Add all scheduled payments to find the total amount payable. The National Credit Regulator's consumer guide says the pre-agreement quotation should disclose the amount borrowed, instalments, interest, additional charges and payment dates before you sign.

Compare like for like

Use the same amount needed and a repayment schedule you could realistically meet. If one product pays out less after a fee, compare the net cash received as well as the total returned. Note the due date of each payment. A loan that appears cheaper overall may be unsuitable if its next payment falls before your income arrives.

Use provider calculators carefully

FASTA says its sliders display the costs for a selected amount and number of instalments, including fees and interest. Jabulani Money says its calculator is a reference and an offer follows an affordability assessment. Treat any calculator as a starting point and verify the final quote.

Before accepting

Check the legal provider, save the quotation and agreement, and confirm the repayment method. If a payment would leave too little for essential expenses or existing debt, consider a smaller amount or an alternative to borrowing. See the personal-loan comparison for the providers currently listed on Finpanda.

Loans

Selected advertising partners, shown alphabetically. Finpanda may earn from an application. Compare the lender's full quotation before accepting an offer.