Personal Loan Calculator South Africa.

A personal loan is repaid in equal monthly instalments using the amortisation formula M = P[r(1+r)^n] / [(1+r)^n - 1], where P is the amount borrowed, r is the monthly interest rate (the annual rate divided by 12) and n is the number of monthly payments. Each instalment pays the interest on the outstanding balance first and the rest reduces the capital.

At an example rate of 20% a year (an illustration, not a lender's rate), a R50,000 loan over 36 months costs about R1,858 a month. You would repay roughly R66,894 in total, which is R16,894 of interest. Enter your own rate and term in the calculator above for your figure.

Lenders price a loan on your credit record and score, your income and existing debt, the loan amount and term, and whether the loan is secured or unsecured. The prime lending rate also moves the rates lenders offer. Ask each lender for a written quote showing the interest rate, initiation fee and monthly service fee so you can compare the full cost.

A longer term lowers the monthly instalment but increases the total interest paid. At the example 20% rate, R50,000 costs about R1,325 a month over 60 months against R1,858 over 36 months, but you pay more interest overall.

Extra payments go straight to reducing your outstanding capital. Because interest is charged on the remaining balance, paying capital down sooner means less interest over the life of the loan and a shorter term. Check your credit agreement for any early settlement conditions.

Yes, the maths is the same for any fixed-rate loan with equal monthly payments, and you can also choose quarterly or annual payments. For a home loan use the bond calculator, which is set up for bond repayments at the prime rate.