Payday loans vs personal loans

Compare short-term payday loans and personal loans in SA by cost, amount, term and when each makes sense.

• Payday loans are small (up to R8,000) and repaid within 6 months.
• Personal loans are larger, run longer and have lower rates.
• For the same amount, the right choice depends on how quickly you can repay.

Side by side

• Amount: short-term loans go up to R8,000. Personal loans range from about R2,000 to R250,000+.
• Term: short-term loans run up to 6 months. Personal loans run 6–72 months.
• Cost: short-term interest can be up to 5% a month. Personal loans are capped at repo plus 21% a year.

When each makes sense

A short-term loan can suit a one-off expense you can clear with your next salary. For larger costs, or if you need several months to repay, a personal loan is usually cheaper and the instalments are easier to manage.

Can I roll over a payday loan?

Repeatedly taking new short-term loans to repay old ones becomes very expensive. Consider a personal loan or speak to a debt counsellor.