Revolving Credit vs a Personal Loan: Which Should You Choose?
These two credit structures solve different problems and are priced differently under South African law. Here's the practical difference — and why our own panel sits entirely on one side of it.
Compare loans nowTwo different structures
A personal loan (also called a term loan) gives you a single lump sum upfront, which you then repay in fixed instalments over an agreed term — a month, a year, several years. Once it's repaid, the credit agreement ends. Every one of the 14 lenders on our panel works this way: you apply for a specific amount, and if approved, receive it once, then repay it on a fixed schedule.
Revolving credit (sometimes called a credit facility, access facility, or store/credit card) works differently — you're approved for a credit limit you can draw down, repay, and redraw repeatedly, without reapplying each time. You only pay interest on the portion you've actually used, but because the facility stays open indefinitely, it's structurally easier to carry an ongoing balance rather than clear the debt entirely.
How South African law prices each one
The National Credit Act treats these as distinct categories with different statutory rate caps. Short-term and unsecured personal loans are capped either at a flat 5%-per-month rate (dropping to 3% on subsequent loans within a calendar year, for amounts up to R8,000 over up to 6 months) or, for larger unsecured amounts, at the Reserve Bank's repo rate plus 21 percentage points per year. Credit facilities are capped under their own separate formula. Neither structure is inherently cheaper — it depends on the specific rate a provider charges within their category's cap, and on how you actually use the credit.
This is where usage patterns matter more than the label. A personal loan has a defined end date, which forces a full repayment schedule regardless of your discipline. A revolving facility has no such built-in end point — if you only ever make minimum payments while continuing to draw on the facility, you can end up paying substantially more in cumulative interest than a term loan of the same original amount, simply because the balance never fully clears.
Where our panel fits, and where it doesn't
None of our 14 lenders offer revolving credit — every one of them is structured as a term loan: a defined amount, disbursed once, with a fixed end date. For most of the panel, that means smaller amounts (R500 to R25,000 or so) over short terms (days to a couple of months), squarely in short-term/payday territory. Creditum is the exception worth calling out specifically — it spans R500 up to R350,000 over 2 to 72 months, and its stated model of brokering to multiple banks and lenders lines up closely with how "personal loan" is generally understood in South Africa, more so than the rest of our panel.
If revolving credit specifically is what you're after — for example, wanting the flexibility of a reusable facility rather than a one-off amount — that's a product category South African retail banks typically offer directly, and isn't something any lender on our panel provides.
Choosing between them
If you know the amount you need and want a clear, finite repayment date, a term loan (what our panel offers) is generally the more disciplined structure. If your need is ongoing or unpredictable and you want the flexibility to draw funds repeatedly without reapplying, that points toward revolving credit — just be realistic about the risk of carrying an open-ended balance. Either way, the same core protections apply: a mandatory affordability check, a written pre-agreement quotation, and statutory caps on what you can be charged.
Frequently asked questions
Do any of your lenders offer revolving credit?
No. Based on each lender's published product information, all 14 lenders on our panel offer term loans — a single amount, disbursed once, repaid over a fixed schedule — rather than a revolving credit facility you can draw down and repay repeatedly.
Which of your lenders is closest to a "personal loan" in the traditional sense?
Creditum is the clearest fit — it offers amounts from R500 up to R350,000 over terms from 2 to 72 months, and explicitly brokers to multiple banks and lenders, which lines up with how "personal loan" is typically understood in South Africa. Crezu also reaches a high ceiling (up to R350,000) but over a much shorter term (61 to 120 days), so it reads more like a large short-term loan than a classic personal loan.
Is revolving credit more expensive than a term loan?
Not inherently — both are capped under the same National Credit Act framework, just under different rate categories (credit facilities vs unsecured/short-term credit transactions). In practice, revolving credit can end up costing more over time if you only make minimum payments and keep redrawing the facility, since interest keeps accruing on an outstanding balance that never fully clears.
Can I get revolving credit somewhere else if none of your lenders offer it?
Yes — revolving credit facilities (sometimes called credit facilities, access facilities, or credit cards) are commonly offered by South African retail banks rather than the short-term lenders on our panel. If a revolving facility specifically is what you need, that's worth pursuing directly with your bank.
Related guides
More on borrowing in South Africa, from the same series.
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Understanding Your LoanLong-Term vs Short-Term Loans
How term length changes your total cost, and where our panel’s lenders sit on that spectrum.
Understanding Your LoanInstant Cash Loans: Documents, Timing & Legitimacy
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