How interest is calculated
Daily interest = capital outstanding × rate ÷ 100 ÷ 365 Payments are applied first to unpaid interest, then to capital In duplum: unpaid interest may not exceed the capital outstanding
Recent prescribed rates
| From | Rate |
|---|---|
| 1 July 2023 | 11.75% |
| 1 November 2024 | 11.50% |
| 1 January 2025 | 11.25% |
| 1 March 2025 | 11.00% |
| 1 July 2025 | 10.75% |
| 1 October 2025 | 10.50% |
| 1 January 2026 | 10.25% |
| 1 July 2026 | 10.50% |
| 1 November 2026 | 10.75% (derived from the repo increase; not yet confirmed in a published notice) |
The rate changes on the first day of the second month after the Reserve Bank changes the repo rate. A Government Gazette notice (GN 3887 of April 2026) states 10.25% “as from 1 March 2026”; the statutory change date was 1 January 2026.
Worked examples
R50 000 owed since 15 January 2025
The prescribed rate on 15 January 2025 was 11.25%. That rate applies for the life of the debt, calculated as simple interest each day.
Summary
- Capital
- R50 000.00
- Interest accrued
- R10 155.82
- Capital outstanding
- R50 000.00
- Unpaid interest
- R10 155.82
- Total owing
- R60 155.82
The same debt with the rate following the repo rate
Some agreements or orders let the rate move with the prescribed rate. The breakdown shows interest for each rate period.
Summary
- Capital
- R50 000.00
- Interest accrued
- R9 578.77
- Capital outstanding
- R50 000.00
- Unpaid interest
- R9 578.77
- Total owing
- R59 578.77
Frequently asked questions
What is the prescribed rate of interest?
The rate that applies to debts carrying interest where no rate has been agreed or set by law. Since August 2014 it has been the repo rate plus 3.5 percentage points, determined under the Prescribed Rate of Interest Act.
Does the rate change during the life of a debt?
Generally no — the prescribed rate in force when interest starts to run applies until the debt is paid. A court order or agreement can say otherwise.
What is the in duplum rule?
A common-law rule that stops arrear interest running once unpaid interest equals the outstanding capital. Payments can allow interest to start running again.
Is the interest simple or compound?
Interest at the prescribed rate is simple interest, calculated on the capital only. Do not assume compound interest applies to a legal debt unless an agreement provides for it.