Does my interest cap change when the repo rate changes?

Not for an agreement already concluded. The cap is fixed at the repo rate in force on the day you signed and stays there. Repo changes set the ceiling for new agreements.

Which date on my agreement is the conclusion date?

The date the agreement was entered into. Not the application date, not the payout date, and not the first instalment date. It is normally stated on the agreement.

Can I check an old agreement using today's repo rate?

No, and it is the most common mistake made here. You need the repo rate as it stood on the conclusion date. Using today's rate can make an unlawful agreement look lawful or the reverse.

What about an agreement signed before 2016?

The current Regulation 42 table applies from 6 May 2016. Agreements concluded before that fall under the earlier regime and cannot be judged against the current table.

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The date you signed is what sets your limit

The cap locks to the repo rate on the day the agreement was concluded. It does not move afterwards, and using today's rate gives the wrong answer.

For the five repo-linked credit categories, Regulation 42 sets the maximum rate as the repo rate plus a fixed margin. The question people skip is: the repo rate when?

The answer is the rate in force on the date the agreement was concluded. That date fixes the ceiling for the life of the agreement.

What that means in practice

The Reserve Bank has changed the repo rate many times since these caps took effect in 2016. Each change altered the ceiling for agreements signed afterwards, and left agreements already signed exactly where they were.

So two people with identical personal loans at identical rates can be in different positions: one lawful, one not, purely because they signed months apart. The rate charged did not differ. The ceiling did.

The common mistake

Checking an old agreement against today's repo rate is the most frequent error in this calculation, and it fails in both directions. If the repo rate has risen since signing, a genuinely unlawful agreement can look fine. If it has fallen, a lawful agreement can look like a breach.

Neither answer is any use. You need the repo rate as it stood on the specific day.

Which date counts

The date the agreement was concluded is when it was entered into, not when the money arrived, not when the first instalment was due, and not when you applied. Where those dates differ, the conclusion date is the one the regulation refers to, and it is normally stated on the agreement itself.

Agreements before May 2016

The current Regulation 42 table applies to agreements concluded on or after 6 May 2016. Older agreements fall under the previous regime, which worked differently. Checking a pre-2016 agreement against the current table will not give a meaningful answer.

Checking a specific agreement

These pages explain the rule. Applying it to a real agreement means knowing the repo rate in force on the day it was concluded, which is what verza's API does: give it the credit type, the rate charged and the conclusion date, and it returns a lawful or unlawful verdict with the exact cap, any excess and the full workings.

See how the check works

Questions

Does my interest cap change when the repo rate changes?: Not for an agreement already concluded. The cap is fixed at the repo rate in force on the day you signed and stays there. Repo changes set the ceiling for new agreements.
Which date on my agreement is the conclusion date?: The date the agreement was entered into. Not the application date, not the payout date, and not the first instalment date. It is normally stated on the agreement.
Can I check an old agreement using today's repo rate?: No, and it is the most common mistake made here. You need the repo rate as it stood on the conclusion date. Using today's rate can make an unlawful agreement look lawful or the reverse.
What about an agreement signed before 2016?: The current Regulation 42 table applies from 6 May 2016. Agreements concluded before that fall under the earlier regime and cannot be judged against the current table.

The maximum legal interest rate in South Africa Which credit category does your agreement fall into?If you think your interest rate is above the legal limit