Personal loan vs credit card
A personal loan is a fixed amount repaid over a set term; a credit card is a revolving limit you can use again and again. Which is cheaper depends on how quickly you pay it back.
How they work
A personal loan pays out a lump sum, and you repay it in equal monthly instalments over a term such as 24 to 72 months. A credit card gives you a limit to spend from; you can pay the full balance or a minimum each month, and the limit is available again as you repay.
Interest and fees
| Personal loan (unsecured) | Credit card | |
|---|---|---|
| Maximum interest under the NCA | Repo + 21% (28.25% at the 7.25% repo rate) | Repo + 14% (21.25% at the 7.25% repo rate) |
| Monthly service fee | Up to R 69 including VAT | Up to R 69 including VAT |
| Interest-free period | None | Usually up to 55 days on purchases if you pay in full |
| Repayment | Fixed instalment, ends on a set date | Flexible; minimum payments can stretch the debt for years |
Your actual rate depends on your credit record and is often well below the cap. The National Credit Act also caps the once-off initiation fee.
Which is better?
- For a large, planned cost you will repay over a year or more, a personal loan is usually better: the fixed term forces the debt to end.
- For everyday spending you clear each month, a credit card can cost nothing, because of the interest-free period.
- For short-term needs you can repay within a few months, a card is often cheaper than paying a loan initiation fee.
- If you only ever pay the minimum on a card, it can end up the most expensive option of all.
Before you borrow
Compare the total cost, not only the monthly payment: add up every instalment and fee. Borrow only what you need, and check the repayment fits comfortably in your budget even if rates rise.
Frequently asked questions
Is a personal loan better than a store card?
Often, yes. Store cards are credit facilities with the same cap as credit cards but usually charge close to the maximum, and they tempt you to spend more in one shop.
Can I use a personal loan to pay off my credit card?
Yes, if the loan rate and fees are lower and you stop using the card. The debt consolidation calculator compares the two.
Does applying for credit affect my credit score?
Each application is recorded. Several applications in a short time can lower your score, so compare quotes before applying.
Related calculators
Personal Loan Calculator
Estimate your monthly repayment, total interest and total cost for a personal loan.
Open calculator →CALCULATORCredit Card Payoff Calculator
Estimate payoff time, total interest and total amount paid from your current balance, interest rate and monthly payment.
Open calculator →CALCULATORDebt Consolidation Calculator
Compare paying your current debts as they are with one consolidation loan, by monthly instalment and total cost.
Open calculator →Rate and fee caps from the National Credit Act regulations (Government Notice R.1209 of 2015, as amended) and the National Credit Regulator, at the repo rate of 7.25% set in September 2026. Checked 16 October 2026. Caps change with the repo rate.