How to compare two loan quotes
Two quotes are comparable only if you compare the right things in the right order. Rates and instalments are the two figures most likely to mislead you; the total cost of credit is the one that settles it.
What you need to know
Start with the total cost of credit on each quote — the single rand figure showing everything above the principal. If one is materially higher for the same amount and term, that is your answer before you look at anything else.
Then check the instalment against what you actually have spare. A cheaper total is worth nothing if the instalment fails; a marginally more expensive loan you can comfortably meet is the better agreement.
Then look for credit life insurance. This is where two quotes with matching rates most often diverge, and where your right to substitute your own policy can produce a real saving.
Finally check the term. If the quotes are for different terms they are not directly comparable — ask each lender to requote on the same term before deciding.
The four line items worth querying on any quote
- Credit life insurance — is it included, is it compulsory, and may you substitute your own policy?
- The initiation fee — is it added to the loan or deducted from what you receive?
- The service fee — is the quoted figure inclusive of VAT?
- Any optional extras that were added by default rather than chosen.
Related
Sources and last checked
- National Credit Act 34 of 2005 and its regulations — Government, as at 10 August 2026.
Page last checked 10 August 2026. Statutory caps and lender terms change — confirm anything you intend to rely on with the provider or the National Credit Regulator. Found something wrong? Tell us and we will correct it.