How do I compare two loan offers?

Compare the total you will repay for the same amount of money in your account over the same term. The offer with the lower total is cheaper. Then check the things a total doesn’t show: compulsory insurance, fees taken off the payout, and what happens if you settle early.

That is the whole method. The rest of this guide shows how to get the numbers and where people usually trip up.

Start with written quotes

Under the National Credit Act a lender has to give you a pre-agreement statement and quotation before you sign. It sets out the amount, the term, the interest rate, every fee and the total you will repay. Ask each lender for one. An advert, a calculator result or a figure read to you on the phone is not a quote.

Check the date on each quote. A quotation is valid for a limited period, so compare two that are current.

Put both offers on the same footing

Most bad comparisons happen here. If one lender quotes R5 000 over four months and another R6 000 over six, their totals can’t be compared directly. Ask both for the amount and term you actually want.

Be precise about the amount. “Loan amount” and “amount paid to you” can be different numbers when fees are deducted at the start. Compare what reaches your bank account, because that is the money you get to use.

The comparison worksheet

Copy these rows onto paper or into a note, or print this page, and fill in both columns from the quotes. Nothing you write on this page is saved or sent anywhere.

When the worksheet is full, the decision is usually obvious. The row that matters most is cost of credit. The rows below it tell you whether there is a catch.

A worked example with two terms

To show the method without inventing anyone else’s prices, here are two RandLeaf options for the same R5 000: four months or six. Worked example using RandLeaf’s published pricing, version RL-PRICE-2026-10. It is not a personal offer: a real quote depends on your assessment.

Offer B lowers the monthly repayment by about R437.99, and costs R183.29 more overall. Neither is wrong. The cheaper offer is the one with the lower total. The safer offer is the one you can repay every month without borrowing again. Your budget decides between those two.

The “cost for every R100 received” row is useful when two quotes pay out slightly different amounts: it puts them on one scale.

What the total doesn’t tell you

• Compulsory extras. If insurance is required, note its monthly cost and what it covers. You may be able to use an existing policy instead.
• Deductions from the payout. A fee taken at the start means you borrow money you never receive, and may pay interest on it.
• Early settlement. Ask how the settlement figure is calculated. You should pay what you owe up to the settlement date, not interest for months you won’t use the money.
• Repayment method and date. A debit order that runs before your salary arrives will bounce. Check the date can match your payday.
• Charges if a payment fails. The agreement sets these out. Read that section before you sign, not after.

Red flags in an offer

Walk away, or at least slow down, if you see any of these:

• Fees that appear in the agreement but not in the quote you were given.
• Insurance included with no explanation of whether it is compulsory.
• Pressure to sign today because “the offer expires”.
• A quote that exists only as a WhatsApp message or a phone call.
• Any request to pay money before the loan is paid out. That is the classic sign of a scam, covered in our guide to fake loan messages.

Making the decision

For two offers on the same footing, take the lower total unless the worksheet shows a catch. Then test it against your budget: the repayment should fit after rent, food, transport and your other debts. If neither offer fits, the honest answer is that borrowing isn’t the right step yet. How our costs work and the calculator let you test RandLeaf amounts and terms before you apply.