Interest is one part of borrowing cost. Compare everything paid with the cash received, including fees and any required cover.
What to check
- Principal
- instalments
- once-off charges and ongoing charges
Use the written quote to separate cash received, scheduled payments and charges outside those payments. Keep a calculation with each quote.
A decision to avoid
Calling the interest rate the full price of the loan.
A calculation you can check
Illustration only: cash received R2 000; three payments of R750; a separate required charge of R50. Total paid = 3 × R750 + R50 = R2 300. Difference from cash received = R2 300 − R2 000 = R300. This difference is not an annual interest rate. Include the charge only if it is outside the three payments; do not count it twice.
Questions about this decision
What should I check first?
Interest is one part of borrowing cost. Compare everything paid with the cash received, including fees and any required cover.
Which information do I need for this decision?
Principal, instalments, once-off charges and ongoing charges.
Which mistake should I avoid here?
Calling the interest rate the full price of the loan.
How do I check principal?
Locate the actual dated record for Principal. Compare it with the other records in this checklist; ask the organisation responsible for any unexplained difference.
How do I check instalments?
Locate the actual dated record for instalments. Compare it with the other records in this checklist; ask the organisation responsible for any unexplained difference.
What should I do if a required detail is missing?
Mark it as unresolved. Ask for that precise detail before choosing; do not substitute an advertised example for your own document.
What is the next practical step?
Use the written quote to separate cash received, scheduled payments and charges outside those payments. Keep a calculation with each quote.
How can I verify the explanation?
Use the documents listed above. Check quoted amounts and dates in the original record; use the official reference links for the organisation’s guidance.
