Understanding Interest Rates and Loan Costs

The total you repay on an eKasi Pay Credit loan is made up of the principal, interest, a once-off initiation fee, a monthly service fee, and a mandatory credit life insurance premium — all capped by the National Credit Act. Every amount is shown in your quote before you sign, so there are no surprises.

Understanding Interest Rates and Loan Costs

When you take out a loan, the total repayment is made up of several components. Understanding each one helps you make informed decisions.

Loan cost breakdown

• Principal — The amount you borrow (between R500 and R4,000)
• Interest — The cost of borrowing, charged within National Credit Act limits
• Initiation fee — Once-off setup fee, regulated by the NCA, includes VAT
• Service fee — Monthly administration fee, includes VAT
• Credit life insurance — A mandatory premium (capped at R4.50 per R1,000 of cover) that settles your balance if you die, become disabled or are retrenched
• Total repayment — Principal + interest + fees + credit life. This is what you pay back, collected in a single debit order on your next payday
• Late payment charges — Added if your payment is not received on time

How to minimise your costs

1. Borrow only what you need — A smaller principal means less interest and a lower premium
2. Pay on time — Avoid late charges entirely
3. Pay early if possible — Settling before the due date carries no penalty and can reduce total interest

Always review your loan agreement carefully before signing. The total repayment amount is clearly stated so there are no surprises.

For a fuller breakdown of the components, see our loan costs and fees page and How is my Credit Life premium calculated?