NCA short-term credit transaction and its caps

Decisimo makes it easy to automate and run credit decisions for short-term credit transactions, which defer at most R8,000 for full repayment within six months, with the money paid to the consumer for their own use. The page gives the maximum monthly interest rate, set by the consumer’s short-term loan count that calendar year, and the fee caps as decision table cells to copy into a credit decision.

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Short-term credit transaction definition

Under Reg 39(2), a short-term credit transaction defers at most R8,000, repayable in full within six months, and pays the money to the consumer for their own use. It includes pawn transactions and excludes credit paid to a party related to the lender.

The amount deferred and repayment term determine whether an agreement falls into this type. The decision also needs the consumer’s count of short-term loans from the lender in the calendar year, because that count affects the interest rate cap.

Maximum interest rate and fees

Reg 42 sets the maximum interest rate and initiation fee for this type, and Reg 44 sets the service fee. The interest rate cap is monthly and must be disclosed as a monthly rate.

Limit	Maximum amount	Rule
Interest rate	Monthly 5% for consumer's first short-term loan from a lender each calendar year, 3% for every later loan that year	Reg 42 Table A
Initiation fee	Fixed amount R165, plus 10% of deferred amount above R1,000, capped at R1,050	Reg 42 Table B
Monthly service fee	Monthly cap of R60	Reg 44

Decision tables for short-term credit caps

Each table below copies as cells to paste into a decision table, with one column per attribute. The attribute paths are examples that can be renamed to match the lender’s data.

Short-term credit classification

Classifies a loan as short-term credit when at most R8,000 is deferred and repayment is due in full within six months, with the first matching row winning.

`loan.amount` Condition	`loan.term_months` Condition	`loan.is_short_term` Result
`<=8000`	`<=6`	`true`
`*`	`*`	`false`

Short-term loan rate and fee limits

Sets the maximum monthly rate and service fee according to how many short-term loans the consumer already had from the lender that calendar year.

`loan.credit_type` Condition	`consumer.short_term_loans_this_year` Condition	`pricing.max_monthly_rate` Result	`pricing.max_service_fee` Result
`=short_term`	`=0`	`5`	`60`
`=short_term`	`>=1`	`3`	`60`

Initiation fee by amount

Sets the maximum initiation fee by amount, using a fixed amount plus a percentage of the amount above a threshold.

`loan.credit_type` Condition	`loan.amount` Condition	`fee.fixed` Result	`fee.factor` Result	`fee.above` Result
`=short_term`	`<=1000`	`165`	`0`	`1000`
`=short_term`	`(1000,9850]`	`165`	`0.1`	`1000`
`=short_term`	`>9850`	`1050`	`0`	`1000`

Affordability assessment

Reg 23A applies to short-term credit transactions, except pawn transactions under Reg 23A(2). Under Reg 23A(13), repayment history must be checked within seven business days before approval.

Under s.80 and s.81, the lender assesses the consumer’s understanding, repayment history, means, prospects and obligations. The lender does not enter into a reckless credit agreement.

Short-term credit in market figures

The tiles below come from the NCR’s quarterly market report, and the consumer credit tracker carries the series.

NCR figures for the quarter ended June 2026

Gross debtors book

R3.2bn

Share of credit book

0.1%

Credit granted

R3.8bn

Book 120 days or more in arrears

13.1%

Build the decision

Use the NCA affordability calculator to work the caps for a type at a repo rate, and the decision template for an online short-term or unsecured loan to build the decision. This page is a reading of the regulations for building a decision, and the lender’s legal team checks it against the current text.

Other NCA credit types

Questions we get asked

What qualifies as short-term credit under the NCA?

Reg 39(2) defines it as credit where at most R8,000 is deferred, repayable in full within six months, and paid to the consumer for their own use. The definition includes pawn transactions and excludes credit paid to a party related to the lender.

What is the maximum interest rate on a first or later short-term loan?

Reg 42 Table A sets the monthly rate at 5% for the first short-term loan in a calendar year. It sets the rate at 3% for subsequent loans in the same calendar year.

Do pawn transactions count as short-term credit and need an affordability assessment?

Pawn transactions are included in short-term credit under Reg 39(2). Reg 23A does not apply to pawn transactions under Reg 23A(2).

What is the maximum initiation fee on a short-term loan?

Reg 42 Table B sets the fee at R165 plus 10% of the amount above R1,000. The maximum fee is R1,050.