I
Loans
Initiation Fee
A once-off fee charged when you get a new loan — the lender's admin cost for processing your application and setting up your account. The NCA caps it, and it varies by lender. It gets added to your loan balance, so you're repaying it over the full term.
Usage Examples
"Bongani applied for a R50,000 personal loan from Capitec. Their initiation fee was 2.41% of the amount — R1,205. So his actual loan balance was R51,205, repaid over 48 months, not 50,000 over 48 months."
"Thandi compared initiation fees between Nedbank (R950 on a R40,000 loan) and FNB (R870 on the same amount). Over 36 months she'd pay roughly R30 extra per month with Nedbank. Over the loan term, those 'tiny' fees add up."
"Andile got a short-term loan from Wonga for R8,000. The initiation fee was R320. That doesn't sound like much, but it was 4% of the borrowed amount — hectic compared to Capitec's standard 2.41%."