Guiding consumers since 2009

How much interest should you be paying?

By Staff Writer

The Reserve Bank held a meeting of the MPC and decided to leave the Repo rate unchanged. The Repo rate is the interest rate at which the Reserve Bank lends to the commercial banks, the commercial banks then lend to you at, in general, Repo plus 3.5% also known as the Prime rate. There is some debate at what level Prime should be set and disagreement between the Reserve Bank and the commercial banks over it. However there are maximum interest rates set by the National Credit Act. So what interest rate should you be paying?

 

  • Homeloans Repo X 2.2 + 5% = 20.4%
  • Personal loans Repo X 2.2 + 10% = 25.4%
  • Unsecured credit Repo X 2.2 +20% = 35.4%

 

These are the maximum amounts that you may be charged under the terms of the National Credit Act. It is a recession and the cost of credit can be a killer. So check up on all your credit agreements and make sure that you are not paying more for your credit than you should be. There are a number of ways that you can get a better rate of interest if you think that you are paying too much. If you have a homeloan, you can contact a homeloan specialist and see if they can get you a better rate of interest on your homeloan. You can also shop around and compare credit cards, looking for the one with the lowest rate of interest.

If you have a personal loan you may be able to consolidate your personal loan debt into another loan with a lower rate of interest, pay off your existing loan with the new one and pay back the new one at a cheaper rate. The National Credit Act is designed to put the power in the hands of consumers and you should be able to save on your interest. Interest charges make up the bulk of what you will pay back on credit with the interest charges often being larger than the amount lent to you. So if you have a lot of debt, work on it now so that you will be able to get through the recession and honour all of your commitments.

Interest rate decision from Tito Mboweni: 


Recent Articles

Featured Ensure your family doesn’t feel the impact of your retrenchment

Retrenchment doesn’t only change the way you view yourself; it also alters the relationship between you and your family. Things can go from good to bad within a short space of time. But you can do something to prevent your family from feeling the impact of retrenchment.

Someone got injured on my property – now what?

Life is unpredictable and no matter how careful we are, accidents happen. But what if someone has an accident while visiting your house? Your guest could fall off the stairs, slip on the floor or get bitten by your dog. 

Are you ready for a house upgrade?

You moved into your home knowing one day you would need to make some changes to turn it into your dream home - add a new bedroom, a second bathroom, build a double storey or even move out.

How income protection can help you when you’re sick

Your greatest asset is probably your ability to earn an income, which provides a certain lifestyle and the capacity to take care of your dependants. That’s why it’s so important to protect your income against unforeseen illness or injury and to provide for your dependents after your death.

Deals

Register for a free online course with Wits

Price: Free
When: Daily
Where: Online

Edgars slogan T-Shirts from R60

Price: From R60
When: While stocks last
Where: Nationwide

3 Months Free on Samsung Galaxy A7 contract

Price: From
When: Daily
Where: Nationwide


Latest Guide

Complete guide on personal income tax