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Interest rates are down. Here’s how it can benefit you

In this article, we explain how you benefit when the repo rate decreases.

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Check your loan offers

All the offers you see on ClearScore are tailored to your credit score and financial circumstances.

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When you borrow money to buy a home or car, you want to secure the lowest interest rate possible so that you can pay off your debt faster. When the Reserve Bank cuts interest rates, the cost of borrowing decreases, meaning it’s a good time to check the loan offers available to you and pay off your existing debts quicker.

The repo rate is the rate at which the South African Reserve Bank (SARB) lends money to commercial banks. The Monetary Policy Committee of the Reserve Bank meets several times a year to review and decide whether to increase, decrease or keep the repo rate at the same level.

Whenever the repo rate changes, South African banks also adjust their lending rates. They will lend money to customers at a slightly higher rate than the repo rate in order to make a profit. Banks use what’s known as the “prime lending rate” as a basis to calculate how much interest to charge their different clients. This is why you’ll often see loans advertised as prime plus a certain percentage.

It becomes less expensive to borrow money when interest rates decrease. Your credit score, income and financial situation will also determine the type of deal you get on a loan. To get the best rate, you may want to work on improving your credit score before you apply for a loan.

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When the cost of borrowing decreases, it’s a good time to check the loan offers available to you. On ClearScore, you’ll find tailored deals based on your unique situation. You can even check how likely you are to be accepted before you apply (don’t worry, this won’t affect your credit score).

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When you pay off your home loan or car finance plan, you could get money back in your pocket each month. If you choose not to reduce your monthly repayments, your loan will be cheaper in the long run as you’ll be paying less in interest. It’s worth speaking to your lender to find the best solution for your financial situation.

If you have multiple debts to pay off, you may want to think about consolidating them. Having one monthly payment should reduce your outgoings and make it easier to manage your money. When interest rates go down, you can pay off your debt with favourable loan terms. You can read more about what debt consolidation loans are and how they can help you in this article.


With more than 9 years of experience working in fintech and e-commerce, Anna is helping people all over the world change the way they manage their finances.