South Africa : How much it costs to borrow R100,000 in South Africa
- 11 April 2022 / News / 251 / Fares RAHAHLIA
If used correctly credit can add positive value to your overall financial well-being. But you need to ensure that you understand what the total amount is that you will re-pay and if that amount is reasonable for the need you want to use the credit for, says Ester Ochse, product head of FNB Money Management.
Ochse provided the example of a person borrowing an amount of R100,000 for a period of five years. The quote that you receive from the financial institution says that you get an interest rate of 15% and the monthly instalment is R2,508.46.
Ochse said a credit provider will calculate your instalment amount as follows:
- Capital (or principle) amount – that is the actual amount that you borrow. In this instance, the amount of R100,000.
- Interest rate – that is how much the financial institution is going to charge you for borrowing the money from them. The amount that is charged will depend on your credit score. In this example, the interest rate is 15%.
- Monthly service fee – these are the fees that the financial institution will charge monthly to administer the loan. These normally range from R50 to R115 per month. In this instance let’s assume that it is R69 per month.
- Initiation fee – That is the amount that the financial institution will charge for the loan documents and admin for starting the agreement. These are also around R1,000 per loan. Let’s assume that this one is R1,207.50.
- Consumer Protection Plan (CPP) – This is insurance that will pay out and cover the outstanding amount on the loan in the event of death disability or temporary loss of income. Let’s assume that in this instance it is R324 per month.
All these amounts add up to the total cost that you will pay for the loan over the term to a total of R50,507.60, said Ochse. This added to the original R100,000 loan would bring the actual total to R150,507.60.
MOROCCO - IMF Mission Highlights Moroccan Central Bank's Transparency Practices
- 28 December 2022
This mission, whose expertise and relevance of recommendations praised Bank Al-Maghrib, focused on examining the bank's transparency practices in five areas, relating to "Governance", "Policies", "Ope...
MOROCCO - Morocco Has Strong Inflation Fundamentals, Says Economy Minister
- 27 December 2022
"Morocco has long had the lowest inflation in the region, and has been able to minimize the impact of the crisis on the purchasing power of citizens despite a difficult economic situation in 2022," sa...
MOROCCO - Ambassador to AU Urges PAP to Ensure Full Participation of African Citizens in Continent's Development
- 20 December 2022
The PAP was established with a clear statutory mandate to ensure primarily the effective participation of African citizens in the economic integration and development of the continent, the Moroccan di...
MOROCCO-Morocco Opposes Modernity, Social Reality's Hopes to Fractures, Fears Expressed in Fragmented World - Azoulay Tells 'The Atlantic Dialogues'
- 19 December 2022
"Carried by the committed and proactive leadership of His Majesty King Mohammed VI, Morocco has chosen, in the land of Islam, to make the legitimacy and richness of all its diversity the central engin...
MOROCCO-Lower House Speaker Visits Austria to Strengthen Parliamentary Cooperation
- 16 December 2022
The visit of Talbi Alami is the first of a speaker of an Arab and African legislative body in the Austrian Parliament and comes to commemorate the 240th anniversary of Moroccan-Austrian relations, cel...