Understanding the total cost of a personal loan

When you compare personal loans, the monthly instalment is the number most people notice first. It is useful, but it does not tell the whole story.

In South Africa, lenders are required to give you a pre-agreement quotation that sets out the interest rate, initiation fee, monthly service fee and any credit life insurance. Adding these together over the full term gives you the total amount repayable.

A longer term usually lowers the monthly instalment but increases the total you pay. A shorter term does the opposite. Try to choose the shortest term you can comfortably afford.

AFINQO only shows you offers once a lender has confirmed them, including the total repayment, so you can compare like with like before you decide.