· Built around the Debt consolidation calculator
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When the payments on three or four accounts no longer fit into the month, the offers start arriving: one loan, one payment, less to pay. Sometimes that is the right move. Often it swaps a short, painful debt for a long, expensive one. This post works through the sums a person in debt trouble meets - debt consolidation, the real interest rate on a loan, the legal limits under the National Credit Act, when an old debt prescribes, and the interest on arrears when someone owes you - with real numbers and the law behind each.
Run your own numbers
The calculator starts on the example below: a credit card, a store card and a personal loan, rolled into one loan at 19% over 60 months. Type your own balances, rates and payments.
Checked against published figures
Before publishing, CalcSA ran the same inputs through its calculators:
- Loan rate: R1 000 000 repaid at R9 983.80 a month over 240 months is 10.50% a year - the standard bond example on SA bank calculators (R1 000 000 at 10.5% over 20 years = R9 983.80). Our loan interest rate calculator runs it backwards and gives 10.50% (11.02% effective); our bond calculator gives R9 983.80 forwards.
- NCA caps: unsecured credit repo + 21%, mortgages repo + 12%, short-term credit 5% a month - Table A of the National Credit Regulations as amended by Government Notice 1080 (6 November 2015). With repo at 7.25% that is 28.25% and 19.25%; our NCA limits calculator gives both.
- Initiation fee on R50 000 unsecured: R165 + 10% of R49 000 = R5 065, capped at R1 050 + VAT = R1 207.50 - the same regulation; the monthly service fee is capped at R60 + VAT = R69. Our calculator matches both.
- Prescription: 3 years for ordinary debts, 6 for bills of exchange, 15 for State loans, 30 for bonds, judgments and tax - Prescription Act 68 of 1969, section 11. Our prescribed debt calculator uses those periods.
Not verified against a named bank page for this post: the R9 983.80 bond example is the widely published figure and matches the standard annuity formula to the cent, but no single bank page was reopened. The consolidation comparison is CalcSA's own arithmetic on the NCA fee caps - we found no published SA worked example with these exact debts.
Worked example 1: consolidating three debts
- Today: R80 000 owed on three accounts, R3 500 a month. A R30 000 credit card at 20.75% (R1 200 a month), a R10 000 store card at 21% (R500) and a R40 000 personal loan at 26% (R1 800).
- Carry on as you are and you are debt-free in 34 months, having paid R107 201 in all.
- The consolidation loan is R81 207.50 - the R80 000 plus the maximum R1 207.50 initiation fee - at 19% over 60 months.
- New payment: R2 175.57 a month - R2 106.57 instalment plus the R69 service fee. That is R1 324.43 a month less.
- Total paid: R130 534 - R23 333 more, because the debt now runs 60 months instead of 34.
- The fix: consolidate, then keep paying R3 500. The lower rate then works for you and the loan is gone sooner than the old debts would have been. Close the cards, or the balances come back.
Photo: Karolina Grabowska on Pexels (free licence)
Worked example 2: what is your loan really charging?
- R100 000 borrowed, R2 500 a month for 60 months: 17.27% a year - 18.71% effective once the monthly compounding counts (loan interest rate calculator).
- Total interest: R50 000 - R150 000 repaid on R100 000 borrowed.
- That is inside the 28.25% cap for unsecured credit, so it is legal - but it is prime plus 6.52%, where a bond costs prime (personal loan calculator).
- Only the amount, instalment and term are needed. Type them off the credit agreement; leave out the separate R69 service fee, which the cap treats on its own.
Worked example 3: the legal limits under the NCA
- Unsecured R50 000 personal loan: at most 28.25% a year, R1 207.50 to start, R69 a month. A 30% rate or a R1 500 initiation fee on that loan is over the limit (NCA limits calculator).
- Home loan of R1 500 000: at most 19.25% a year, with an initiation fee of up to R6 037.50 (R5 250 + VAT).
- Short-term loan of R2 000: at most 5% a month for the first one in a calendar year, 3% for later ones; the initiation fee is R304.75 at most (R165 + R100 + VAT).
- The caps move with repo. When the Reserve Bank moved repo to 7.25% on 25 September 2026, the unsecured cap moved to 28.25% with it.
- Charged more? Ask the lender in writing to correct it, then complain to the National Credit Regulator.
Worked example 4: has the debt prescribed?
- Store card, last payment 15 March 2023: prescribed on 15 March 2026 - on 22 October 2026 that was 221 days ago (prescribed debt calculator).
- The clock restarts if you acknowledge the debt - a payment, even R50, or a signed admission. Collectors know this; do not pay or sign anything on an old debt you dispute before checking the date.
- A summons served before the 3 years are up stops the clock. A letter of demand does not.
- Bonds, judgments and tax take 30 years, so a home loan or a SARS debt will not quietly disappear.
- Count the days yourself with the days between dates calculator.
Worked example 5: when someone owes you - interest on arrears
- R50 000 unpaid for 12 months at the prescribed rate of 10.50%: R5 250 interest - simple interest, R437.50 a month (interest on arrears calculator).
- From 1 November 2026 the prescribed rate becomes 10.75% - repo plus 3.5% - and the same year is worth R5 375. The calculator switches over on that date.
- Interest stops when it equals the capital - the in duplum rule. At 10.50%, R10 000 owed stops growing after 9 years and 7 months, at R20 000 in all.
- A contract rate replaces the prescribed rate if the agreement sets one.
Before you sign anything
- Compare the total, not the instalment. The lower monthly payment is how a longer loan is sold.
- Check the rate against the cap and the fees against R1 207.50 and R69.
- If nothing fits the month any more, debt review is the formal route - a registered debt counsellor applies to court to lower the payments, and new credit is closed while you are under review.
Sources
- National Credit Regulations under the National Credit Act 34 of 2005, regulation 42 Table A (interest) and regulations 42-44 (initiation and service fees), as amended by Government Notice 1080, Government Gazette 39379 of 6 November 2015: acts.co.za, as cited by the CalcSA NCA limits calculator, read 16 October 2026.
- Prescription Act 68 of 1969, sections 11, 12 and 14: gov.za, read by CalcSA 16 October 2026.
- Prescribed Rate of Interest Act 55 of 1975 (repo plus 3.5%) and the in duplum rule: as cited by the CalcSA interest on arrears calculator; repo 7.25% from 25 September 2026 per the South African Reserve Bank, as used across CalcSA.
- Worked example, R1 000 000 at 10.5% over 20 years = R9 983.80 a month: the standard bond example published on SA bank bond calculators; no single bank page reopened for this post.
Calculators used in this post
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