Question 1

How do store account interest rates compare to personal loans?

Accepted Answer

Store accounts (also called retail credit) and personal loans are both regulated under the National Credit Act. The law sets a maximum interest rate for each type of credit, and that maximum moves when the Reserve Bank's repo rate (the rate banks pay to borrow) changes. In practice, store account rates tend to sit toward the higher end of what is legally permitted, while personal loan rates from banks vary more with the applicant's credit profile. For the exact current legal maximum for your credit type, check the National Credit Regulator (NCR), and check your own account statement for the rate you are actually being charged.

Question 2

Does a store account balance amortise the same way as a loan?

Accepted Answer

Yes — both use the standard reducing-balance calculation: a fixed monthly instalment where more of each payment goes toward interest early on and more toward the balance later. The figures in this calculator use that same standard method for both paths.

Question 3

Why might the total cost differ even at similar rates?

Accepted Answer

Total cost is driven by three inputs: the balance, the rate, and the term (how many months you take to pay it off). Even a small difference in rate compounds over the term, and a shorter term reduces total interest even at a higher rate. Adjust the figures above to see the effect of each input on your own numbers.

Month	Store Account Paid	Personal Loan Paid
2	R 3 782,38	R 3 667,20
5	R 9 455,96	R 9 168,00
7	R 13 238,34	R 12 835,20
10	R 18 911,92	R 18 336,00
12	R 22 694,30	R 22 003,20

Store Account vs Personal Loan Calculator

Account Details

Store Account Path

Personal Loan Path

Difference in Total Cost

Cumulative Cost Over Time

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