Payday Loans. What you should know

Jul 29, 2022 | Helpful Tips

Nearly 50% of South African households currently rely on social grants as their primary source of income. When this isn’t enough, a short-term loan is often needed to help. People who aren’t eligible for loans from registered lenders will try to borrow money from Mashonisas (non-registered lenders) or payday lenders.

Legal lenders are registered with the National Credit Regulator (NCR), which has laws and regulations protecting borrowers. 

Mashonisa’s are not registered with the National Credit Regulator (NCR) and lend money informally.

It’s good to know what interest could be charged by a legal lender or a Mashonisa.

Short-term cash loans from a registered lender for R1000 have a maximum interest rate of 5% (National Credit Act); borrowers must pay back a maximum of R1150 (R1000 original loan plus R150 interest).

If R1000 cash is borrowed from a Mashonisa, interest of up to 50% could be charged. Therefore customers may have to pay back R1500 or more.

Know the difference


  • There is no contract or record of payments
  • Consumers often have to leave passports, IDs, driver’s licences or Sassa cards with them 
  • This is not a legal (regulated) process

Legal credit provider:

  • A contract signed by the consumer
  • No original personal documents are kept
  • This is a legal regulated process

To work out the interest rates for a Payday Loan, visit our calculator


  • A Payday Loan is a short-term loan to be paid within 30 days.
  • Mashonisa is a non-registered lender.
  • Registered lenders are lenders registered with the National Credit Regulator (NCR).

*Disclaimer: Any information within this article is not intended, nor does it constitute financial, tax, legal, investment, or other advice. Whilst every care has been taken to confirm the accuracy of the information presented and to describe generally accepted practices; neither the authors, editors or publishers can be responsible for errors or omissions or for any consequences from application of the information given.

National Credit Act


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