Rates, fees & insurance · Guide

NCA interest rate caps for every credit type

South Africa's National Credit Act sets a legal maximum interest rate for every type of credit agreement, and the figure differs by credit type. For an unsecured personal loan, the current maximum is 28,00% a year. For short-term credit, it's 5% a month on a first loan and 3% a month after that. Both numbers come from Regulation 42 of the Act, and the personal-loan figure moves with the South African Reserve Bank's repo rate. This guide sets out the full Regulation 42 table, what counts as your credit type, and what actually happens to your rate if the repo rate changes.

The Regulation 42 rate-cap table for every credit type

Regulation 42 of the National Credit Act sets a legal maximum interest rate for seven types of credit agreement. Personal loans and short-term credit are the two BetterLoans is most useful for — the table below shows all seven, so you can see exactly where they sit.

These figures are current as at 22 July 2026, using a repo rate of 7,00%. The 'current maximum' column moves whenever the South African Reserve Bank changes the repo rate — see the box below.

One line worth knowing on incidental credit: the 2% a month cap only starts to matter once you're actually overdue. By law, an incidental credit agreement (a store account, a medical bill on terms) is only treated as coming into existence 20 business days after a late fee or higher price first applies — so a bill paid within that window never reaches this cap at all.

This guide goes deep on the two credit types BetterLoans works with: unsecured personal loans and short-term credit. The other five appear here for completeness, not because BetterLoans arranges them.

What the repo rate has to do with your maximum

RR in the table above stands for the reference rate — the South African Reserve Bank's repurchase (repo) rate. Every repo-linked maximum is repo rate plus a fixed number of percentage points, so it moves whenever the repo rate does.

When the repo rate changes, the maximums in the table above change with it, for any new agreement priced after that date. The 2015 version of this table (Government Notice 1080, effective 6 May 2016) is still the one in force — nothing has replaced it since, though the National Credit Regulator is required to review it periodically.

Short-term and incidental credit are the two exceptions. Their caps — 5%/3% a month, and 2% a month — are fixed monthly percentages, not linked to the repo rate at all.

The maximum for an unsecured personal loan

As at 22 July 2026, with the repo rate at 7,00%, the legal maximum for an unsecured personal loan is 28,00% a year — repo plus 21 percentage points.

This is a ceiling, not a price. No lender is required to charge anywhere near 28,00%, and most don't for every applicant. A lender prices your actual rate on risk: your credit record, income, and affordability all feed into where you land, and a strong profile usually sits well below the maximum.

Interest is also only one part of what a loan costs. Initiation fees, a monthly service fee, and sometimes credit life insurance sit alongside it — see the full cost of a loan, not just the interest and loan initiation and service fees explained for the rest of the stack.

For the full picture of how personal loan interest rates work day to day, and what moves yours up or down, see personal loan interest rates in South Africa.

Does your rate change if the repo rate moves

For most personal loans, no. A fixed-rate agreement stays at the rate you signed for, for the life of the loan — the law does not allow a lender to move it later unless your agreement itself says it can.

Section 103(4) of the National Credit Act only allows a credit agreement's rate to vary during its term if the agreement itself provides for that, tied by a fixed formula to a reference rate the lender names in the contract. No such term, no variation. Personal loans in South Africa are generally written as fixed-rate agreements, so once you sign, the rate you agreed to is the rate you keep, whether the repo rate rises or falls afterwards.

Some products are genuinely variable, such as certain credit facilities and overdrafts, and those can move — but only through the formula disclosed in the agreement, and only with at least 30 business days' written notice of any change. A lender can never quietly raise your rate.

The maximum for short-term credit

Short-term credit is capped differently: 5% a month on your first loan, then 3% a month on any short-term loan you take again within the same calendar year.

Short-term credit means a loan of R8 000 or less at the start, repayable within six months, where money was actually paid out to you. The law requires this rate to be disclosed as a monthly figure, not an annual one, which is why it looks different from the personal-loan row above.

The drop from 5% to 3% matters if you borrow short-term more than once in a year: your second and later loans in the same calendar year are capped lower than your first. For more on how this credit type works and when it fits, see the types of short-term loans in South Africa.

What a lender can charge you once you're in default

The law caps what builds up once you fall behind. Under section 103(5), the total of interest, fees, and other charges that accrue while you're in default can never exceed the outstanding balance you owed at the moment you defaulted.

This is the National Credit Act's in-duplum rule. It covers the initiation fee, the service fee, interest, the cost of any credit life insurance, default administration charges, and collection costs — the same closed list of charges a credit agreement is allowed to carry under section 101. Once their combined total during default reaches what you owed when you first fell behind, they stop accumulating.

There's a related protection for arrears interest specifically: a lender can't charge a higher rate on an overdue amount than the highest rate already applying to the rest of your loan. Falling behind doesn't give a lender room to reprice your debt upward.

Related guides

Official sources

• SARB Monetary Policy Committee statement, May 2026
• Government Gazette 39379, Notice 1080
• National Credit Regulator

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