The prescribed rate of interest changed with effect from 1 July 2022 to 8.25% per annum. The previous rate was 7.75%.

According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. The prescribed rate of interest applies to all debts unless a different rate is set by law, by trade custom or by agreement between the parties. The parties can therefore avoid the application of the prescribed rate by agreeing to a different interest rate, subject to other applicable laws such as the National Credit Act which may limit the amount of interest that can be charged.

When the Reserve Bank changes the repo rate a new prescribed rate of interest becomes effective from the first day of the second month following the month of the new repo rate announcement. The applicable rate of interest for a debt is the rate that is in effect at the time when the interest begins to run. That rate will continue to apply even if the prescribed rate of interest changes at a later date.

Here is a table of the changes in the prescribed rate since 1993 (note: there was no change in 2021):

Date range Rate of interest
1 October 1993 – 31 July 2014 15.50% pa
1 August 2014 – 29 February 2016 9.00% pa
1 March 2016 – 30 April 2016 10.25% pa
1 May 2016 – 31 August 2017 10.50% pa
1 September 2017 – 30 April 2018 10.25% pa
1 May 2018 – 31 December 2018 10.00% pa
1 January 2019 – 31 August 2019 10.25% pa
1 September 2019 – 29 February 2020 10.00% pa
1 March 2020 – 30 April 2020 9.75% pa
1 May 2020 – 31 May 2020 8.75% pa
1 June 2020 –30 June 2020 7.75% pa
1 July 2020 – 31 August 2020 7.25% pa
1 September 2020 – 31 December 2021 7.00% pa
1 January 2022 – 28 February 2022 7.25% pa
1 March 2022 – 30 April 2022 7.50% pa
1 May 2022 – 30 June 2022 7.75% pa
1 July 2022 – 8.25% pa