Maximum Interest Rates on Loans in South Africa (2026): What Lenders Can Legally Charge
Prices and facts checked 16 October 2026. We don't accept payment for rankings.
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Short answer: South African law caps what lenders can charge. Most caps are set as the Reserve Bank's repo rate plus a fixed margin. With repo at 7.25% from 25 September 2026, the maximum on an unsecured personal loan is 28.25% a year, on a home loan 19.25% and on a credit card or overdraft 21.25%. Short-term loans (under R8,000, for up to six months) are capped at 5% a month on your first loan (National Credit Regulations, regulation 42; Moneyweb).
General information, not legal or credit advice. These are maximums, not what you should expect to pay. Your rate depends on your credit profile. Always compare the total cost of credit on the pre-agreement quote.
The maximum interest rates (October 2026)
The caps are in regulation 42 of the National Credit Regulations, as amended in November 2015. "RR" is the repo rate, 7.25% from 25 September 2026 (SAnews). We calculated the current caps from the formulas.
| Type of credit | Legal cap (formula) | Cap at 7.25% repo |
|---|---|---|
| Mortgage (home loan) | RR + 12% a year | 19.25% |
| Credit facilities (credit cards, overdrafts, store cards) | RR + 14% a year | 21.25% |
| Unsecured credit (personal loans) | RR + 21% a year | 28.25% |
| Developmental credit (small business, low-income housing) | RR + 27% a year | 34.25% |
| Short-term credit | 5% a month (first loan), 3% a month (later loans in the same year) | n/a |
| Other credit agreements | RR + 17% a year | 24.25% |
| Incidental credit | 2% a month | n/a |
Source: Regulation 42, Table A.
Caps move with the repo rate. When the Reserve Bank raised the repo rate by 0.25 points in September 2026, every repo-linked cap rose by 0.25 points too.
Maximum initiation fees
Lenders may also charge a once-off initiation fee, which is capped too (Regulation 42, Table B):
| Type of credit | Maximum initiation fee |
|---|---|
| Mortgage | R1,100 + 10% of the amount above R10,000, max R5,250 |
| Credit facilities | R165 + 10% of the amount above R1,050, max R1,050 |
| Unsecured credit | R165 + 10% of the amount above R1,000, max R1,050 |
| Short-term credit | R165 + 10% of the amount above R1,000, max R1,050 |
| Incidental credit | Nil |
Example: on a R5,000 personal loan, the maximum initiation fee is R165 + 10% × R4,000 = R565. On anything above about R9,850, the fee hits the R1,050 cap. We calculated these from the table.
Lenders can also charge a monthly service fee, which is capped separately by the regulations. Check the amount on your quote.
Your rights when you borrow
Under the National Credit Act, according to the NCR:
- A quote first. The lender must give you a pre-agreement statement and quotation before you sign.
- Plain language. Documents must be in plain, understandable language.
- Reasons if you're declined. You can ask why your application was turned down.
- No card retention. Lenders may not keep your bank card or ID as security. The NCR says you should report this to the police and the NCR.
- Help if you're over-indebted. See our debt review guide.
How to check if you're being overcharged
- Find your interest rate on your credit agreement or statement.
- Identify the type of credit. A personal loan is usually "unsecured credit". A credit card is a "credit facility".
- Compare with the cap in the table above at the repo rate on the date your agreement was made, or the current rate if your loan has a variable rate.
- If it's higher, complain to the lender first, then to the National Financial Ombud (free) or the NCR on 0860 627 627.
Only borrow from NCR-registered credit providers. You can check the register on ncr.org.za (NCR). Unregistered lenders ("mashonisas") often charge far more than the law allows.
FAQ
What is the maximum interest rate on a personal loan in South Africa?
The repo rate plus 21% a year for unsecured credit, so 28.25% with repo at 7.25% (from 25 September 2026).
What is the maximum interest on a credit card?
Credit cards are credit facilities, capped at repo plus 14%, so 21.25% a year at today's repo rate.
How much can a short-term (payday) loan charge?
5% a month on your first short-term loan, and 3% a month on later ones in the same calendar year, plus capped fees.
Does the cap change when the repo rate changes?
Yes. Most caps are set as the repo rate plus a margin, so they rise and fall with it.
Where do I complain about an illegal interest rate?
First to the lender, then to the National Financial Ombud Scheme or the National Credit Regulator.
Sources
Pages we used for this article, checked on or before the update date above.
- National Credit Regulations, regulation 42 · acts.co.za
- Moneyweb · moneyweb.co.za
- SAnews · sanews.gov.za
- NCR · ncr.org.za
Changelog: 16 Oct 2026, first published at a repo rate of 7.25%.