Best Low Interest Personal Loan lenders in South Africa for 2025
- Written by Wesley Vos
- Updated
Personal Loans
FNB: BEST FOR Personalised Loans
Annual Interest (APR)
17.5-29%
Loan Amount
R1k-R360k
Loan Term
1-6 yrs
Apply on partner site
Pros & cons
Pros
- FNB's "Take-A-Break" feature lets borrowers skip their January repayment
- They allow early loan settlement with no penalty fees
- They offer personalized interest rates and fixed monthly repayments for clear financial planning
- Simple online application
- You can use the loan for whatever you need
- Flexible terms
Cons
- While the interest rates are personalized, they may be higher for those with a lower credit score
- The maximum loan amount offered is R360,000, which may not be sufficient for some borrowers' needs
- The bank places a strong emphasis on online banking, which may not be ideal for those who prefer traditional, in-person banking methods
- Initiation and monthly fees apply
- Requires extensive documentation for approval
Our take
Overview
First National Bank (FNB), one of South Africa’s oldest and most trusted financial institutions, offers a range of personal loans tailored to different financial needs. With a strong reputation for customer service and reliability, FNB’s low-interest personal loans are designed for customers who need affordable financing for large expenses like home renovations, weddings, or debt consolidation. The bank offers both secured and unsecured loans, with the secured loans offering better interest rates and higher borrowing limits.
FNB is known for its personalised interest rates, ensuring that customers receive the best possible deal based on their credit profile and financial situation. They offer flexible repayment terms, allowing borrowers to repay over a period of up to 60 months. The application process is fully digital, ensuring quick access to funds, and there are no penalties for early repayment, making it a customer-friendly option.
Key Facts
- Loan Amount: FNB offers personal loans up to R360,000, making it ideal for large planned or unplanned expenses.
- Interest Rate: Rates range between 17.50% and 29% per annum, adjusted based on credit score and loan term.
- Repayment Terms: Borrowers can choose repayment terms of 1 to 72 months, allowing flexibility based on individual needs.
- No Early Repayment Penalties: Borrowers can repay the loan early without incurring any penalties, helping them save on interest.
- Fixed Interest Rates: FNB offers fixed interest rates throughout the loan term, ensuring protection from rate hikes and making budgeting easier.
- Quick Approval: Loan approvals are processed within 48 hours, providing fast access to funds when needed.
- CreditLife Insurance: FNB provides a mandatory (for long-term loans) insurance plan to cover repayments in unforeseen circumstances.
- Take-A-Break January: Keep your personal loan up to date and automatically get a well-deserved payment break every January. You can decide not to take a payment break and to pay your monthly instalment, thereby settling your personal loan quicker and save on interest fees.
Known qualification requirements
- Must be a South African citizen between 18 and 64 years of age
- Valid South African ID
- Proof of residence
- Latest payslip and 3 months’ bank statements
- Active South African bank account
Fees
FNB charges an initiation fee and a monthly service fee for their personal loans, which are disclosed upfront during the application process. These fees vary depending on the loan amount and term.
Time to receive funds
Once approved, FNB disburses funds within 48 hours, ensuring that customers can access their loan quickly. In some cases, funds may be transferred sooner, especially for existing FNB customers.
Illustrative Example
Loan Amount: R30,000-00
Repayment Terms: 24 months
Interest Rate: 18% p.a
Initiation Fee: R1,207-50 (Once-off)
Monthly Admin Fee: R69.00
Monthly Credit Life Insurance (where applicable): R100.00
Monthly Instalment: R1,796.00
Total Cost of the Loan: R43,104.00
*Please note this is just an illustrative example of what it would cost you. Your rate and initiation fee will be determined according to your personal risk profile. To get an accurate quote we recommend getting a quote from First National Bank.
Personal Loans
African Bank: BEST LOANS FOR GENEROUS REPAYMENT TERMS
Annual Interest (APR)
15-24.50%
Loan Amount
R2k-R250k
Loan Term
7 mo-6 yrs
Apply on partner site
Pros & cons
Pros
- Fixed monthly repayment rate
- Competitive, low-interest rates
- Repayment term up to 6 years
- Credit life insurance available for added protection
- Simple online application
- Fixed interest rates
- Earn 1.3% of your loan instalments back in Audacious Rewards points.
Cons
- Some customers find African Bank's interest rates higher, especially for those with lower credit scores.
- While the loan application is usually straightforward, some customers experience delays in approval or disbursement, causing frustration for those needing funds urgently.
- Some customers experience delays and unclear communication from customer service, especially during loan applications or issue resolution.
- Some customers report unexpected fees, advising careful review of fine print and potential charges during the loan process.
Our take
Overview
African Bank is a well-established financial institution in South Africa, known for offering a variety of financial solutions, including personal loans with competitive interest rates. Founded with a strong focus on providing accessible credit solutions, the bank has earned a reputation for reliability and customer-centric service. African Bank’s low-interest personal loans are designed to cater to various financial needs, from covering emergencies to funding home improvements or debt consolidation.
One of the standout features of African Bank’s personal loans is their flexibility. Borrowers can access loans ranging from R2,000 to R250,000, with repayment terms between 7 and 72 months. African Bank also offers competitive interest rates that start as low as 15%, depending on the applicant’s credit profile. The loan process is streamlined, with online applications and same-day approval for qualified borrowers, making African Bank a convenient option for those seeking affordable credit solutions.
Key Facts
- Loan Amount: African Bank offers loans ranging from R2,000 to R250,000, suitable for various financial needs.
- Interest Rates: Interest rates range from 15% to 24.50% annually, based on the borrower’s credit profile.
- Repayment Terms: Flexible repayment options ranging from 7 to 72 months.
- Quick Approval: African Bank provides same-day approval for many loan applications, allowing quick access to funds.
- Credit Life Insurance: Borrowers can add credit life insurance for additional protection against unforeseen circumstances.
- No Early Repayment Penalties: Borrowers can repay their loans early without incurring penalties, offering flexibility.
- Utilize the loan calculator to help you plan your loan repayments.
Known qualification requirements
- South African ID
- Proof of income (latest payslip or bank statements showing salary deposits)
- Proof of residence (no older than 3 months)
- Must be 18 years or older
Fees
Initiation fee: R1207.50 once off
Monthly admin fee: R69
Time to receive funds
Funds are typically disbursed within 24 hours of loan approval, making African Bank a fast and efficient option for personal loans.
Illustrative Example
Loan Amount: R20,000
Repayment Term: 12 months
Annual Interest Rate: 15%
Fees: Initiation fee of R1,207.50 + R69 monthly service fee
Monthly Instalment: R2,036
Total Cost of Credit: R4,432.00 (interest)
Total Repayment: R24,432.00
*Please note this is just an illustrative example of what it would cost you. Your rate and initiation fee will be determined according to your personal risk profile. To get an accurate quote we recommend getting a quote from African Bank.
Personal Loans
Capitec: BEST for outstanding service
Annual Interest (APR)
13.5-29.25%
Loan Amount
R10k-R500k
Loan Term
1-7 yrs
Apply on partner site
Pros & cons
Pros
- The highest customer satisfaction rate in South Africa with 82.2 points out of 100
- Potentially the lowest interest rates dependent on your credit score
- Repayment terms up to 7 years
- Simple online application
- Committed to clarity and transparency
- Fixed monthly instalments
- Competitive interest rates starting from 13.5%
Cons
- There is room for improvement in the turnaround time for resolving customer queries
- Loan approval times can sometimes be slower than desired
- Capitec Bank's loan offerings are less diverse, limiting options for borrowers needing specialized products
- Credit life insurance is an additional cost
Our take
Overview
Capitec Bank, one of South Africa’s most popular financial institutions, is known for offering simple and accessible banking solutions. Founded in 2001, Capitec has grown rapidly due to its transparent and affordable products, including its competitive low-interest personal loans. The bank’s focus is on making financial services user-friendly, offering an efficient loan application process through their mobile app, online platform, or in-branch services.
Capitec’s personal loans cater to various financial needs such as debt consolidation, home improvements, or unexpected expenses. With loan amounts of up to R500,000 and flexible repayment terms of up to 84 months, Capitec stands out for its fixed monthly repayments and personalised interest rates. The bank also prides itself on quick approvals, with funds often disbursed within 24 to 48 hours after approval, making it a convenient option for South Africans seeking flexible and affordable credit solutions.
Key Facts
- Loan Amount: Capitec offers personal loans ranging from R10,000 to R500,000, providing options for a variety of financial needs.
- Repayment Terms: Loans can be repaid over 12 to 84 months, allowing borrowers to choose a term that fits their budget.
- Interest Rates: Interest rates start from 13.5% per annum, based on the applicant’s credit profile and affordability.
- Application Process: You can apply online, through the Capitec app, or in-branch, with approvals typically completed in minutes.
- Same-day Funds: For approved applicants, funds are available immediately, providing quick access to money when needed.
- Credit Insurance: Optional credit insurance is available to cover retrenchment, death, or disability, offering additional peace of mind.
Known qualification requirements
- Minimum age: 18 years
- Valid South African ID
- Latest payslip
- Three months’ bank statements
- Proof of residence (less than three months old)
Fees
- Initiation fee: Up to R1,207.50
- Monthly admin fee: R69
- Interest rate: 12.9% to 29.25% (depending on credit profile)
Time to receive funds
Funds are typically disbursed within 24-48 hours of loan approval. The quick processing makes Capitec a fast option for personal loans.
Illustrative Example
Loan Amount: R50,000.00
Repayment Terms: 48 months (4 years)
Annual Interest Rate: 22% (dependent on your credit rating)
Fees: Initiation fee of R1,207.50 and monthly admin fee of R69
Monthly Instalment: R1,741.00
Total Cost of Credit: R33,568.00 (interest over the loan term)
Total Repayment: R83,568.00
*Please note this is just an illustrative example of what it would cost you. Your rate and initiation fee will be determined according to your personal risk profile. To get an accurate quote we recommend getting a quote from Capitec.
Personal Loans
Nedbank: BEST FOR tailored rates
Annual Interest (APR)
11.5-29.25%
Loan Amount
R2k-R400k
Loan Term
6 mo-6 yrs
Apply on partner site
Pros & cons
Pros
- Nedbank offers competitive rates and transparent fees, ensuring a predictable borrowing experience
- Personalised interest rates starting at 11.5%
- Loans are tailored to your budget, but longer terms may increase total interest costs.
- Repayment term up to 6 years
- Simple online application
- Nedbank's DebiCheck lets you approve debit orders, keeping you in control of your money
- Pay on time to earn Greenbacks rewards, usable as cash, for banking fees, or in your investment account
Cons
- We were unable to find any information online confirming whether their personal loans have fixed payments, so it remains unclear if the payments are fixed or variable.
- Interest rates may be high for riskier credit profiles
- Credit life insurance adds to the overall cost
- Initiation and monthly service fees apply
- Some users have experienced glitches with Nedbank's online and mobile platforms.
- Some customers feel Nedbank lacks the personal touch smaller banks offer
- While some praise Nedbank's customer service, others have had unsatisfactory experiences.
Our take
Overview
Nedbank is one of South Africa’s leading financial institutions, providing a wide range of financial services, including low-interest personal loans. Founded in 1888, Nedbank has a long history of serving the South African market, offering reliable and innovative banking solutions. Their personal loans are designed to help customers manage large expenses, such as debt consolidation, home improvements, or emergencies, with flexible repayment terms and competitive interest rates.
What sets Nedbank apart is their personalised approach to lending. Borrowers receive tailored interest rates based on their credit profile, with loans ranging from R2,000 to R300,000. Repayment terms extend up to 72 months, giving customers the flexibility to choose repayment plans that fit their budget. With an easy online application process, Nedbank is known for quick approval times, often within 48 hours, making it a convenient and efficient choice for personal financing needs.
Key Facts
- Loan Amount: Nedbank offers personal loans from R2,000 to R400,000, providing options for a variety of financial needs.
- Interest Rate: Interest rates start at 11.5% and go up to 29.25%, depending on the borrower’s credit profile.
- Repayment Terms: Flexible repayment terms from 6 to 72 months, allowing borrowers to select plans that suit their financial situation.
- Same-Day Disbursement: Once approved, funds are typically disbursed within 24 to 48 hours, making it a fast solution for urgent needs.
- No Early Settlement Fees: Borrowers can repay their loans early without incurring penalties, helping them save on interest.
- Mandatory Credit Life Insurance: Borrowers are required to take out credit life insurance, which covers the loan in the event of death, disability, or retrenchment.
- Rewards: By paying your monthly instalments on time, you’ll earn Greenbacks rewards that you can use as cash. You can also use your Greenbacks to pay your banking fees or deposit them into your investment account.
Known qualification requirements
- South African ID
- Proof of income (latest payslip)
- Three months’ bank statements
- Proof of residence
- Must have a credit score in good standing
Fees
Nedbank charges an initiation fee based on the loan amount, along with a monthly service fee of R69. Additionally, a credit life insurance premium is required to cover the borrower in case of death, disability, or retrenchment. All fees are clearly disclosed during the application process.
Time to receive funds
After approval, which generally takes 48 hours, the loan is disbursed within 24 to 48 hours, offering fast access to funds. Existing Nedbank clients may experience faster turnaround times.
Illustrative Example
Loan Amount: R30,000-00
Repayment Terms: 24 months
Interest Rate: 18.5% p.a
Initiation Fee: R1,207-50 (Once-off)
Monthly Admin Fee: R69.00
Monthly Loan Insurance: R109.23
Monthly Instalment: R1,771.38
Total Cost of the Loan: R42,513.12
*Please note this is just an illustrative example of what it would cost you. Your rate and initiation fee will be determined according to your personal risk profile. To get an accurate quote we recommend getting a quote from Nedbank.
Personal Loans
Absa Bank: BEST for Competitive Rates
Annual Interest (APR)
13.75-29.25%
Loan Amount
R3k-R350k
Loan Term
1-7 yrs
Apply on partner site
Pros & cons
Pros
- Absa offers a simplified application process online, via app, or in-branch
- Quick approval process after submitting necessary documents for fast access to funds
- Rate Beat Guarantee ensures best interest rate
- Absa's Credit Protection Plan covers death, disability, or illness, protecting your family from debt
- Committed to clarity and transparency
- Competitive interest rates starting from 13.75%
- Flexible loan amounts and repayment terms
Cons
- Some customers perceive Absa's interest rates and fees as higher than those of other banks
- Mandatory credit life insurance increases total cost
- Fees apply, including initiation and service fees
- Some reviews report delays in loan application responses and customer service inquiries
- Some customers report communication difficulties, especially with updates on loan applications or term changes
Our take
Overview
Absa is one of South Africa’s largest and most trusted financial institutions, with a strong history in the local market. It offers a variety of financial products, including personal loans, designed to meet the needs of a wide range of customers. Absa’s low-interest personal loans are particularly popular for those looking to finance major expenses such as home improvements, debt consolidation, or personal projects. The bank is well-regarded for its commitment to customer service and innovation, allowing customers to apply for loans through various channels, including its mobile app and website.
Absa’s personal loans are flexible and accessible, with loan amounts ranging from R3,000 to R350,000 and repayment terms of up to 84 months. The bank also offers a Rate Beat Guarantee, meaning that if you find a lower interest rate from another lender, Absa will beat it, ensuring you always get the best deal possible. Additionally, customers can benefit from their Credit Protection Plan, which covers repayment in case of disability, illness, or death, providing financial peace of mind.
Key Facts
- Loan Amount: Absa offers personal loans up to R350,000, making it suitable for large financial needs.
- Loan Term: Repayment periods range from 12 to 84 months, allowing flexible and manageable repayments.
- Interest Rates: Absa provides personalized interest rates based on your credit profile, with rates between 13.75% and 29.25%, depending on the loan amount and term.
- Rate Beat Guarantee: Absa promises to beat any lower interest rate you find elsewhere, ensuring you get the best deal.
- Flexible Application: Apply for loans online, via phone, or at an Absa branch, providing multiple convenient options.
Known qualification requirements
- South African ID
- Proof of income (3 months’ bank statements or payslips)
- Proof of residence (not older than 3 months)
- Must be 18 years or older
- Minimum monthly income of R2,000 for loans over 12 months
Fees
- Initiation Fee: Up to R1,207.50 depending on the loan amount.
- Monthly Service Fee: R69 per month.
- Credit Protection Insurance: Optional, offering coverage for disability, retrenchment, or death.
Time to receive funds
Once approved, Absa generally disburses funds within 24-48 hours for online applications. For in-branch applications or if further documentation is required, it may take up to 3 business days.
Illustrative Example
Loan Amount: R50,000.00
Repayment Terms: 36 months (5 years)
Annual Interest Rate: 18% (dependent on your credit rating)
Fees: Initiation fee of R1,207.50 and monthly admin fee of R69
Monthly Instalment: R2,113.00
Total Cost of Credit: R26,068.00 (interest over the loan term)
Total Repayment: R76,068.00
*Please note this is just an illustrative example of what it would cost you. Your rate and initiation fee will be determined according to your personal risk profile. To get an accurate quote we recommend getting a quote from Absa Bank.
Compare personal loan rates with Fundrate's top picks
Lender | Best For | Est. Apr | Loan Amount | Loan Term |
|---|---|---|---|---|
FNB | Personalised loans | 17.5%-29% | R1,000-R360,000 | 1 - 6 years |
African Bank | Generous repayment terms | 15%-24.50% | R2,000-R250,000 | 7 months - 6 years |
Capitec Bank | Outstanding service | 13.5-29.25% | R10,000-R500,000 | 1 - 7 years |
Nedbank | Tailored rates to suit your budget | 11.5-29.25% | R2,000-R400,000 | 6 months - 6 years |
Absa Bank | Competitive rates | 13.75-29.25% | R3,000-R350,000 | 1 - 7 years |
Pros and cons of low interest personal loans
While personal loans can be helpful, they may not be the best financing option for everyone. It’s important to weigh the pros and cons before making a decision.
- Fast funding times
- Lower interest rates than credit cards
- Few restrictions on how funds are used
- No collateral required in most cases
- Money in one lump sum
- Potentially high fees and penalties
- Eligibility requirements can be strict
- Additional monthly payment
- Shorter terms than home equity loans
- Credit damage if you default
What is a Low-Interest Personal Loan?
A low-interest personal loan is a type of loan that offers a competitive, lower-than-average interest rate, helping you save on the overall cost of borrowing. These loans are particularly beneficial if you’re looking to manage expenses affordably over time. With a low-interest personal loan, your monthly repayments will be more manageable, allowing you to fund essential expenses or consolidate higher-interest debts without incurring excessive charges.
Loan Use Cases
When might you consider a low-interest personal loan?
Low-interest personal loans are versatile and can be used to cover various financial needs. Here are some common situations where they might be useful:
- Debt Consolidation: Combine multiple debts into a single, low-interest loan to simplify payments and reduce monthly costs.
- Emergency Expenses: Use a low-interest loan to cover unexpected medical bills or urgent repairs, avoiding high-interest credit card charges.
- Short-Term Cash Flow Needs: Smooth out cash flow issues, especially if your income varies or if you’re self-employed.
- Home Improvements: Make essential upgrades or repairs to your home, boosting its value without relying on high-interest financing.
Loan Eligibility Factors
What are the typical requirements for a low-interest personal loan?
To qualify for a low-interest personal loan in South Africa, most lenders will consider the following factors:
- Minimum Income Requirements: You’ll generally need a steady income, with minimum monthly earnings of around R5,000 to R7,000.
- Credit Score Considerations: A good to excellent credit score is essential for securing lower interest rates, as it shows you have a history of responsible borrowing.
- Employment Status: Full-time employment or proof of regular income for at least 3-6 months is usually required.
- Age Limitations: You must be at least 18 years old to apply, with a maximum age typically around 65-70 at the loan’s end.
Credit Score Impact and How to Improve It
How does your credit score affect a low-interest personal loan?
Your credit score is one of the main factors influencing whether you’ll qualify for a low interest rate. Higher credit scores reflect responsible borrowing, which can give you access to the most competitive rates available.
Tips to Improve Your Credit Score:
- Timely Bill Payments: Pay all debts and utility bills on time to build a positive payment history.
- Lower Your Debt: Reducing outstanding balances can improve your credit utilization ratio, which positively impacts your score.
- Check Your Credit Report: Regularly review your credit report from bureaus like TransUnion to ensure there are no errors affecting your score.
- Limit Credit Applications: Only apply for new credit when necessary, as multiple recent applications can lower your score.
Interest Rates Breakdown
How do interest rates work for low-interest personal loans?
Low-interest personal loans in South Africa offer rates that vary based on your credit profile and the lender’s policies. Here’s how they generally work:
- Typical Interest Rate Ranges: Rates for low-interest personal loans are typically between 11.5% and 29.25% APR, though this varies depending on the borrower’s creditworthiness.
- Factors Affecting Rates: Your credit score, loan term, income, and existing debt levels all play a role in determining the rate you’ll be offered.
- Fixed vs. Variable Rates: Most low-interest personal loans come with fixed rates, meaning your monthly payment remains the same over the loan term, making budgeting easier.
What is APR?
The Annual Percentage Rate (APR) represents the total cost of borrowing, including interest and any additional fees, expressed as an annual rate. Comparing APRs helps you understand the true cost of each loan option.
Early Repayment Flexibility
Can you repay a low-interest personal loan early?
Many lenders in South Africa allow for early repayment on low-interest personal loans, though the terms can vary:
- No Penalty with Some Lenders: Some lenders allow penalty-free early repayments, which can help you save on interest.
- Small Administrative Fees: Certain lenders may charge a small fee for early settlement, so be sure to confirm any fees in your loan agreement.
- Review Your Terms: Make sure to review the loan terms to understand any costs or benefits associated with early repayment, as it could save you a considerable amount.
Comparison with Other Loan Types
How does a low-interest personal loan compare to other loan options?
- Credit Cards: Personal loans typically have lower interest rates than credit cards, making them a more cost-effective choice for large purchases or debt consolidation.
- Payday Loans: Low-interest personal loans have much lower interest rates and longer repayment terms, making them a more sustainable choice than payday loans.
- Home Equity Loans: If you have home equity, this type of loan might offer comparable rates, though it requires putting up your property as collateral.
Regulatory and Legal Considerations in South Africa
What protections do you have as a borrower?
In South Africa, low-interest personal loans are regulated under the National Credit Act (NCA), which offers several consumer protections:
- Interest Rate Caps: The NCA sets maximum interest rate limits to prevent lenders from charging excessive rates.
- Affordability Checks: Lenders must conduct affordability assessments to ensure the loan amount is manageable for you.
- Transparency in Terms: Lenders are required to disclose all fees, rates, and terms upfront, so you understand the full cost of borrowing.
Alternatives to Low-Interest Personal Loans
What other options might suit your needs?
If a low-interest personal loan doesn’t seem right, here are a few alternatives:
- Overdraft Facilities: For smaller, short-term funding needs, an overdraft can provide quick access to cash but usually at a higher rate.
- Microloans: These are generally smaller loans (up to R10,000) with quick approvals, suitable for minor expenses or emergencies.
- Peer-to-Peer Lending: Platforms like FunderJet allow you to borrow from private lenders, potentially at competitive rates depending on your credit profile.
How to Apply for a Low-Interest Personal Loan
Follow these steps to apply for a low-interest personal loan:
- Check Your Eligibility: Ensure you meet the lender’s requirements, including income and credit criteria.
- Gather Your Documents: Prepare documents like your ID, recent payslips, bank statements, and proof of residence.
- Compare Lenders: Use Fundrate to compare interest rates, fees, and terms across providers to find the best fit.
- Submit Your Application: Complete the application online or in-person, providing accurate details to speed up approval.
- Receive Approval and Funds: Once approved, your funds are typically available within a few business days, allowing you to address your financial needs.
FAQs
What is the typical interest rate for low-interest personal loans in South Africa?
Interest rates for low-interest personal loans in South Africa typically range from 11.5% to 29.25%, depending on the lender and your credit profile. Banks often offer more competitive rates compared to alternative lenders.
How long does it take to get approved for a low-interest personal loan?
Approval times vary by lender. For banks like Absa, Nedbank, and Capitec, it can take anywhere from 24 to 48 hours for approval and disbursement, provided all documentation is in order.
What documents do I need to apply for a low-interest personal loan?
Typically, you’ll need:
- A valid South African ID
- Proof of income (3 months’ payslips or bank statements)
- Proof of residence (not older than 3 months)
- A good credit score
Can I qualify for a low-interest personal loan if I have bad credit?
It is more difficult to qualify for a low-interest loan with bad credit, but it is possible. Lenders may offer higher interest rates for applicants with lower credit scores, or you may need to secure the loan with collateral.
Are there any additional fees associated with low-interest personal loans?
Yes, most lenders charge an initiation fee and a monthly service fee. Additionally, credit life insurance may be mandatory to cover the loan in the event of death, disability, or unemployment.
What is the maximum loan amount I can apply for?
Loan amounts typically range from R2,000 to R500,000, depending on the lender. Capitec, for example, offers loans up to R500,000, while Nedbank’s loans max out at R300,000.
How long can I take to repay a low-interest personal loan?
Repayment terms for low-interest personal loans range from 12 to 84 months. Longer terms allow for smaller monthly repayments but may result in higher total interest payments over time.
Are there penalties for early repayment of personal loans?
Most South African lenders, such as Capitec, Absa, and Nedbank, do not charge penalties for early repayment. This allows you to save on interest if you choose to settle your loan earlier than planned.
Do I need collateral to qualify for a low-interest personal loan?
Generally, low-interest personal loans in South Africa are unsecured, meaning no collateral is required. However, your eligibility and interest rate will largely depend on your credit score and financial standing.
How do low-interest personal loan rates compare between banks and alternative lenders in South Africa?
Banks tend to offer more competitive and lower interest rates for personal loans compared to alternative lenders. While rates at banks like Capitec and Nedbank start around 10%, alternative lenders may charge higher rates, especially for those with poor credit.
Why is my personal loan interest rate higher than my home or car loan interest rate?
A secured loan, like a home or car loan, is backed by the actual asset—in this case, the home or car. If you fail to make payments and default, the lender can seize the asset to recover their losses.
In contrast, an unsecured personal loan has no collateral, meaning the lender relies solely on your promise to repay. Because there’s no asset to secure the loan, it carries a higher risk for the lender, which is why unsecured loans typically come with higher interest rates.
However, it’s essential to consider the overall cost of the loan. In some cases, the total cost of a personal loan may be lower than borrowing against your home equity, making it a more affordable option depending on your situation.
How we choose our best personal loan lenders
To select the best personal loans, Fundrate evaluates the most prominent lenders in South Africa. Each lender was ranked focusing on four main categories:
Affordability
This section of the scoring evaluates interest rates, penalties, and fees. Lower rates and fees, along with fewer penalties, contribute to a higher score. Lenders that offer rate discounts, grace periods, and the option to change the due date receive bonus points.
Availability
This category considers factors such as minimum loan amounts, number of repayment terms, eligibility requirements, the option to apply with a co-borrower or co-signer, and the loan turnaround time.
Customer experience
This category includes customer service hours, the availability of online applications, online account access, and mobile apps.
Transparency
For this factor, we assess how clearly information is presented to borrowers on the lender’s website. This includes details on credit requirements, rates, fees, and the availability of prequalification.