Look beyond the monthly payment

Start with the same amount and term

A lower monthly instalment does not automatically mean a cheaper loan. Put the amount you would receive and the number of repayments next to each offer before comparing the headline payment.

Use the lender’s written quote rather than an advert. South Africa’s credit regulations include disclosure of the principal, interest, applicable initiation fees, service fees and credit insurance in the total cost.

Write down the full picture

• Amount you would actually receive.
• Number and amount of repayments.
• Total amount repayable, including applicable charges.
• Any final payment or separately payable cost.

Ask the lender to explain anything that is missing or unclear before accepting.

A simple comparison

Illustration only: receiving R5,000 and making six payments of R1,000 means paying R6,000 altogether. Twelve payments of R600 mean paying R7,200. The second option has the smaller payment but the larger total.

This arithmetic assumes no separate charges. It is not a quote or a recommendation. Consider whether the repayments fit your circumstances as well as the total cost.