Money tools
True cost of a loan
The loan
Example figuresExample rate. Use the rate in your loan offer.
Interest is charged only on what you still owe, so the interest part of each repayment falls as you pay the loan down.
Example amount. Include arrangement, processing or insurance charges.
Monthly repayment
D4,631.73
- Total interest
- D5,581
- Upfront fees
- D1,000
- Total cost (repayments + fees)
- D56,581
- Cost per D100 borrowed
- D13.16
- Effective annual cost
- 26.7%
Effective annual cost counts interest and fees together, compounded monthly.
Monthly repayment D4,631.73 for 1 year. Total interest D5,581, total cost D56,581, or D13.16 for every D100 borrowed.
Flat rate and reducing balance at 20%
| Method | Monthly repayment | Total interest | Effective annual cost |
|---|---|---|---|
| Reducing balance (selected) | D4,631.73 | D5,581 | 26.7% |
| Flat rate | D5,000.00 | D10,000 | 47% |
The same headline rate costs more when it is a flat rate. Here, a flat rate of 20% is about the same as 35.1% a year on a reducing balance. Ask which method a lender uses, and compare offers by total cost or effective annual cost.
Repayment schedule
| Month | Repayment | Interest | Capital | Still owed |
|---|---|---|---|---|
| 1 | D4,631.73 | D833.33 | D3,798.39 | D46,201.61 |
| 2 | D4,631.73 | D770.03 | D3,861.70 | D42,339.91 |
| 3 | D4,631.73 | D705.67 | D3,926.06 | D38,413.85 |
| 4 | D4,631.73 | D640.23 | D3,991.49 | D34,422.35 |
| 5 | D4,631.73 | D573.71 | D4,058.02 | D30,364.34 |
| 6 | D4,631.73 | D506.07 | D4,125.65 | D26,238.68 |
| 7 | D4,631.73 | D437.31 | D4,194.41 | D22,044.27 |
| 8 | D4,631.73 | D367.40 | D4,264.32 | D17,779.95 |
| 9 | D4,631.73 | D296.33 | D4,335.39 | D13,444.55 |
| 10 | D4,631.73 | D224.08 | D4,407.65 | D9,036.91 |
| 11 | D4,631.73 | D150.62 | D4,481.11 | D4,555.80 |
| 12 | D4,631.73 | D75.93 | D4,555.80 | D0.00 |
| Total | D55,580.70 | D5,580.70 | D50,000.00 |
Results are estimates based only on the figures you enter. Before you decide, ask your bank for the actual rates, fees and terms in writing.