Rates & fees · Guide
How your loan quotation protects you before you sign
A loan quotation is the document a lender must give you before you sign anything, not after. South African law calls the fuller version of it a pre-agreement statement, and it sets out exactly what your quote must show and how long the lender is bound to the price. This guide walks through what a quotation must contain, what "binding for 5 business days" actually means, and the one thing it doesn't do: guarantee you the loan.
Why your lender must give you a quotation before you sign
Under the National Credit Act, a lender may not enter into a credit agreement with you until it has first given you a pre-agreement statement and a quotation setting out the full cost and terms, in writing, before you sign.
This is a legal duty, not a courtesy. Section 92 of the Act requires it for every credit agreement, and the exact form changes depending on the size of the loan.
For a small agreement (broadly, a loan under R15 000), the lender must use the prescribed Form 20. For an intermediate agreement (roughly R15 000 to under R250 000) or a large agreement (R250 000 and above), the lender uses Form 20.1, or Form 20 if it offers both small and intermediate loans with similar features. These size bands come from a regulation made under the Act and are still applied in practice as at July 2026.
| Agreement size | Typical principal debt | Form used |
|---|---|---|
| Small | Under R15 000 | Form 20 |
| Intermediate | R15 000 to under R250 000 | Form 20.1 (or Form 20) |
| Large | R250 000 and above | Form 20.1 |
Most personal loans compared through BetterLoans fall into the small or intermediate band, so expect a Form 20 or Form 20.1 quotation either way, the legal effect is the same. For how interest and fees are capped across every credit type, see how South African law caps loan interest and fees.
Your quote is binding on the lender for 5 business days
For 5 business days after the lender gives you a quotation, the law says the lender must, if you ask, enter into the agreement at or below the price it quoted you.
This isn't a marketing promise. The prescribed Form 20 itself prints the instruction in plain type, right near the signature block: "THIS QUOTE IS BINDING FOR 5 DAYS." It's on the actual form you receive, not just buried in the Act.
The rule works a little differently depending on the size of your loan. For a small agreement, the lender must honour the exact rate and cost it quoted, or better, if you sign within 5 business days. For an intermediate or large agreement, the lender can only move the price if the South African Reserve Bank's own bank rate changes between your quote date and your signing date, and even then only by that same margin.
There's also a narrow exception, rarely relevant to a cash personal loan, for goods in short supply: a lender may state upfront that the quote depends on a specific item still being available.
The one thing the binding quote does not do is force the lender to actually give you the loan. It locks in the price, not the approval. The lender still has to run its own affordability check under section 81 of the Act before it signs anything with you, and the law does not require it to grant credit it has assessed as reckless. So a quote is a real, useful protection on cost, just not a promise of a loan. If you want to understand what that affordability check actually looks at, see how a lender assesses affordability.
What every line on your quote means
Your quotation breaks the loan down into specific line items. Here's what each one means in plain language.
| Quote line item | What it means |
|---|---|
| Principal debt | The actual amount you're borrowing, before any fees or interest are added. |
| Deposit / distribution | How the principal debt is paid out. For most personal loans this is simply the full amount paid to you, with no deposit required. |
| Instalment amount | What you pay each period, usually monthly, including interest, fees and any credit life premium bundled in. |
| Number of instalments | How many payments you'll make until the loan is settled. This sets your loan term. |
| Total of all instalments (total repayable) | Every instalment added together, the full amount the loan will cost you if you pay it exactly as scheduled. See the full total cost of credit breakdown for how this figure is built up. |
| Interest rate | The annual rate charged on what you still owe, always capped by law for your credit type. |
| Initiation fee | A once-off fee for setting up the loan, capped by regulation and disclosed whether you pay it upfront or it's added to what you owe. |
| Monthly service fee | A capped, recurring fee for administering the loan each month. See how initiation and service fees are calculated. |
| Credit life premium | The cost of the credit life insurance covering the loan if you die, are disabled, or lose your income, bundled into your instalment if you take the lender's cover. |
Wording varies slightly. A Form 20.1 quote for a bigger loan lists a couple of extra items, such as the basis for any cost if you later cancel, but the substance is the same across both forms.
Does a cooling-off period apply to your personal loan
For most online personal loans, no. The National Credit Act's 5-business-day cooling-off right applies only to a lease or an instalment agreement signed away from the lender's premises, and an ordinary personal loan is neither.
It's an easy mix-up, because two different rules both use "5 business days". The quotation's binding period covered above locks in your price before you sign. The cooling-off right is a completely different mechanism: it lets you unwind an agreement you've already signed, but only for a lease or an instalment agreement (typically goods bought and paid off in instalments, like vehicle finance) signed somewhere other than the lender's registered business premises.
An ordinary unsecured personal loan, applied for online or over the phone, generally falls outside both of those conditions. So don't assume you can cancel a signed personal loan within 5 days the way you might return goods bought door-to-door. There's also a third "5 business days" rule, used later in a loan's life if you ask for a locked-in figure to settle your loan early. That's a separate mechanism again, and it isn't covered here.
Use your 5 days without the pressure to apply everywhere
The 5 business days exist so you can read your one quote properly, not so you feel you need to apply to five different lenders at once.
It's tempting to request quotes from several lenders and compare them side by side. But every full application can trigger its own credit and affordability check, and several checks in a short space of time can work against you. Use your quote well instead: read every line, check the total repayable against what you can comfortably afford, and ask the lender to explain anything unclear. You have 5 business days to do exactly that, unrushed.
If you want to see more than one option without triggering a separate check every time, that's what BetterLoans' matching process is for. You complete one application, and we connect you with NCR-registered lending partners who can quote you, so you're comparing real options rather than repeatedly reapplying.
If you're already under debt review or debt administration, your quotes and settlements go through your debt counsellor's process, not the general steps described here.
Getting a quotation costs you nothing and commits you to nothing. You're free to walk away, compare it against your budget, or simply let the 5 days lapse without signing. For a wider checklist of what to look at before you commit to any loan, see what to check before you sign a loan.
When you're ready, one short application connects you with NCR-registered lending partners who can send you a quotation to review. BetterLoans is an introducer, not the lender, our partners issue the quote and make the lending decision. No upfront fees, no obligation, and approval depends on affordability and lender checks.