Monthly instalment, total interest, and cost of a personal loan.
Monthly instalment
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Total interest
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Total repaid
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Cost of credit
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Your breakdown
Updates live as you type
Item
Amount
Worked example
Take an R80,000 personal loan at 18 percent a year over 36 months, with an initiation fee of R1,207. The instalment comes from the standard amortisation formula, which spreads the loan into equal monthly payments that each cover the month's interest first and reduce the balance with the rest. That works out to about R2,892 a month. Over 36 months you repay R104,119 in total, so the interest is R104,119 minus R80,000, which is R24,119. Adding the initiation fee, the full cost of credit is R25,326. Early instalments are mostly interest and later ones are mostly capital, which is why settling the loan early saves more than a simple split of the term would suggest.
Step
Amount
Loan amount
R80,000
Monthly instalment (36 months)
R2,892
Total repaid
R104,119
Interest
R24,119
Cost of credit (with R1,207 fee)
R25,326
How it is calculated
The instalment uses the amortisation formula, principal times the monthly rate, divided by one minus one plus the monthly rate raised to the power of minus the number of months. The monthly rate is the annual rate divided by twelve. That single payment, repeated for the full term, clears both the capital and the interest exactly. Total interest is the sum of all instalments less the amount borrowed, and the cost of credit adds the initiation fee on top. In South Africa the National Credit Act caps the maximum interest a lender may charge on unsecured credit at a multiple of the repo rate, and it also caps initiation and monthly service fees, so a quote far above those limits is a warning sign. The tool assumes a fixed rate and equal instalments, so a loan with fees rolled into the balance or a variable rate will differ a little.
Frequently asked questions
What interest rate can a personal loan charge in South Africa?
The National Credit Act caps the maximum interest on unsecured credit at a multiple of the repo rate, so lenders cannot charge an unlimited rate. Quoted rates vary with your credit profile and the loan size. This calculator uses simple amortisation: a fixed instalment that covers interest first, with the rest reducing the balance.
What is an initiation fee on a South African personal loan?
An initiation fee is a once-off charge for setting up the credit agreement, regulated under the National Credit Act. The NCA caps the maximum initiation fee on unsecured credit at R1,207.50 for loans above a threshold, plus VAT. Lenders often add this fee to the loan balance or charge it upfront. This calculator lets you enter the fee separately so you can see the true cost of credit, which includes both the interest and the fee.
Does settling a personal loan early save money?
Yes, settling early reduces the total interest you pay because interest accrues on the outstanding balance. Early in the term, most of each instalment covers interest, so paying a lump sum at month six removes far more interest than the same payment at month 30. The NCA requires lenders to allow early settlement, though they may charge a settlement fee capped by regulation. Always request a settlement quote before making a lump-sum payment.
How does a personal loan compare with a credit card for the same borrowing need?
A personal loan offers a fixed term, a fixed instalment, and usually a lower interest rate than a revolving credit card. A credit card is flexible: you can repay and redraw, but minimum payments can extend the debt indefinitely and effective rates are often higher. For a defined purchase or consolidation need with a clear repayment timeline, a personal loan is generally cheaper. For short-term bridging where you will clear the balance within the interest-free period, a credit card can cost nothing.