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Loans
Interest Rate
The percentage charged annually on your outstanding loan balance. Different loans have different rates: personal loans might be 18-28%, car loans 14-20%, home loans 9-12%. The NCA caps rates depending on loan type. Higher rates mean you pay more moola total.
Usage Examples
"Bongani got quoted 19% on a Capitec personal loan, 22% on a Wonga short-term loan, and 17% on an FNB vehicle finance deal. All his rates — but the longer he takes to repay, the more total interest he pays."
"Thandi's store card charged 23% interest per annum, simple interest. But her personal loan from Absa charged 18% per annum, calculated monthly (compound). The compound interest adds up faster than simple, so always check how it's calculated."
"Andile took a payday loan at 5% per month. Multiply by 12 — that's 60% per annum. When the first lender said 5% monthly, he didn't realize it was hectic until the annual rate hit him."