Calculate the true cost of a payday loan in South Africa. See interest, NCA fees, VAT, and total repayment before you sign. Free SA calculator.
| Charge | Amount |
|---|
Indicative only, based on National Credit Act (NCA) maximum allowable fees. Initiation fee: R165 + 10% of the amount over R1,000, capped at R1,050 (excl. VAT). Monthly service fee: R69 (excl. VAT). VAT calculated at 15%. Actual costs vary by lender. Payday loans are expensive — consider alternatives where possible.
Payday loans look simple on the surface — borrow a few thousand rand now, pay it back at month-end. The catch is that the headline interest rate is only one part of what you actually pay. Initiation fees, monthly service fees, VAT, and credit life insurance can quietly double or triple the cost of small short-term loans.
This calculator shows you the full picture before you commit. Enter the amount you want to borrow, the term, and the interest rate the lender is offering, and you'll see exactly how much leaves your account on repayment day — plus the effective annualised cost, so you can compare it fairly against other forms of credit.
How to use the calculator
1. Enter your loan amount. Short-term credit agreements under the National Credit Act are capped at R8,000. If you need more than that, you're looking at a personal loan, not a payday loan, and the rules and rates work differently.
2. Enter your repayment term in days. Most payday loans run for 30 days (until your next payday), but short-term credit can stretch up to 180 days. Longer terms mean more service-fee months, so the cost grows.
3. Choose your loan type. First-time borrowers can be charged up to 5% interest per month. Repeat borrowers at the same lender are capped at 3%. The calculator adjusts the maximum allowable rate based on what you select.
4. Enter the interest rate. Use the rate the lender has quoted you. If you haven't been quoted yet, the default shows the legal maximum so you can see the worst-case cost.
5. Decide on credit life insurance. This is optional cover that settles the loan if you die, become permanently disabled, or lose your income. Lenders often include it by default; you're entitled to opt out or use your own policy.
6. Click Calculate. You'll see your total repayment, the total cost of credit (everything above the principal), an effective APR, and a line-by-line breakdown.
What the calculator includes
Interest
Capped at 5% per month for first loans and 3% per month for subsequent loans from the same credit provider. Applied as simple interest on the loan principal for the term.
Initiation fee
A once-off fee the lender can charge for setting up the agreement. Under the NCA, this is R165 plus 10% of the amount above R1,000, capped at R1,050 excluding VAT. So on a R5,000 loan, the maximum initiation fee is R165 + R400 = R565 excl. VAT.
Monthly service fee
Charged for administering the loan each month. Capped at R69 excluding VAT per month. The calculator charges this for each month (or part-month) of the loan term.
VAT
Initiation and service fees attract VAT at 15%. Interest and credit life premiums do not.
Credit life insurance
Caps vary by credit type, but for unsecured short-term loans the maximum is R4,50 per R1,000 of outstanding balance per month. You're not legally required to take the lender's policy — you can cede an existing life policy or shop for cheaper standalone cover.
Understanding the effective APR
The APR figure tells you what the loan would cost if you held it for a full year. It's the most useful number for comparing payday loans against other credit options, because it normalises for term length.
A R3,000 loan over 30 days costing R500 in fees and interest sounds reasonable — but that's an effective APR of roughly 200%. The same R500 cost spread over a 12-month personal loan would work out to about 16% APR. Same rand cost, very different annual rate, because you only hold the payday loan for a month.
This is why payday loans should be treated as short-term emergency tools, not ongoing borrowing. If you find yourself rolling them over or taking a new one to repay the last, the annualised cost becomes punishing.
When a payday loan might make sense
- A genuine one-off emergency where waiting isn't possible (medical, urgent travel, essential repairs)
- You have a confirmed income arriving before or on the repayment date
- The total cost of credit, after using this calculator, is less than the cost of the alternative (missed rent, lost job, broken essential item)
- You've checked that you can't get cheaper credit — overdraft, credit card, family loan, employer salary advance
When it almost never makes sense
- To pay off another loan (this is debt-cycling territory)
- For discretionary spending like holidays, electronics, or gifts
- If your income on payday won't comfortably cover the full repayment plus your normal expenses
- If you've already taken a payday loan in the last few months and not fully recovered
Cheaper alternatives worth checking first
Employer salary advance. Many SA employers offer interest-free advances against your salary. Always cheaper than a payday lender.
Credit card cash advance. Expensive by credit card standards (around 20–25% per year) but a fraction of payday loan APRs.
Bank overdraft. If you have one, the fees and interest are usually well below short-term credit costs.
Stokvel or family loan. If trust allows, this can be the cheapest option — but treat it like a real loan with a real repayment plan.
Negotiating with the creditor causing the problem. Most landlords, schools, and service providers will arrange a payment plan if you ask before missing a payment.
Your rights under the National Credit Act
Every registered credit provider in South Africa must:
- Conduct an affordability assessment before approving the loan
- Disclose the full cost of credit in writing, in your chosen official language
- Stick to the NCA fee and interest caps shown above
- Allow you to settle the loan early without penalty
- Register with the National Credit Regulator (NCR)
If a lender quotes you fees or interest higher than the caps, walk away — they're either unregistered or breaking the law. You can check a credit provider's registration at the NCR website or report problems to the NCR directly.
Avoid any lender who asks you to hand over your bank card, PIN, or ID document. This is illegal and a strong sign of a loan shark ("mashonisa") operating outside the law.