In short
What you earn from private lending depends on four things: the amount, the form (local or offshore), the term, and prevailing rates. In the South African market, local prime-linked lending is commonly around prime + 1% to prime + 5%, and offshore hard-currency notes around 12% to 16% a year. Treat those as typical market ranges rather than fixed figures — a steadier, more predictable return than the share market.
Local (Rand)
≈ prime + 1% to prime + 5%
Offshore (hard currency)
≈ 12% to 16% a year
What sets it
Amount · form · term · rates
Return style
Income, on agreed terms
01 — The levers
What determines how much you earn?
Private lending doesn't have a single headline rate the way a savings account does. What you earn is shaped by four straightforward levers:
- The amount. The return is a percentage, so more capital simply earns more in Rands at the same rate.
- The form. Local (Rand-based) lending is prime-linked; offshore is a hard-currency return fixed for a term. They behave differently.
- The term. How long the capital is committed. A longer horizon typically supports a firmer rate.
- Prevailing rates. For local lending especially, the going rate moves with South Africa's prime rate.
Put simply: the rate reflects the market you're lending into, and the Rand figure reflects how much you put in and for how long.
02 — Local
What local, prime-linked private lending pays
Local private lending is Rand-based and its return is usually prime-linked — quoted as "prime plus" a margin. In the South African market that margin commonly lands somewhere around prime + 1% to prime + 5%, depending on the arrangement and term. With prime at 10.5% (August 2026), that's roughly 11.5% to 15.5% a year in Rands.
Illustration only, using South Africa's prime rate of 10.5% (August 2026) — check the current rate with SARB. Because the return is prime-linked, it moves as the prime rate moves.
The appeal of the prime-link is that your return tracks the same benchmark the whole lending market moves on — so as rates rise, your income rises with them.
03 — Offshore
What offshore private lending pays
Offshore private lending is a hard-currency arrangement — US dollars, pounds or euros — with a return fixed for a set term. In the market these notes are often quoted around 12% to 16% a year in the hard currency. You deploy in Rands at the exchange rate on the day, and the return is expressed in the currency of the note.
A simple illustration of typical market rates. Offshore returns are held in hard currency; the Rand value when you convert back depends on the exchange rate at that time.
Because the rate is fixed for the term, offshore lending trades the prime-link's upside-and-downside for certainty on the rate — with currency as the moving part instead.
04 — By amount
Indicative returns by amount
Since the return is a percentage, scaling it is simple. Here's how a local, prime-linked arrangement at around prime + 3% (≈ 13.5% a year, using prime of 10.5% in August 2026) would translate across a few amounts — an illustration of typical market rates, not a quote:
| Capital | ≈ Annual return | ≈ Monthly equivalent |
|---|---|---|
| R500 000 | ≈ R67 500 | ≈ R5 625 |
| R1 000 000 | ≈ R135 000 | ≈ R11 250 |
| R2 500 000 | ≈ R337 500 | ≈ R28 125 |
| R5 000 000 | ≈ R675 000 | ≈ R56 250 |
These figures move with the rate and the form — but they show the shape of it. The exact number for your own amount, at today's rates, is a few seconds away.
05 — How you're paid
How the return actually reaches you
A return you can't get to isn't much use, so it's worth knowing how private lending pays out. Broadly, there are two rhythms. The return can be paid to you as income across the term — useful if you're lending for cash flow — or it can be rolled up and paid with your capital at the end, if you'd rather let it compound. Which applies depends on the arrangement.
Either way, the key feature is that you're paid on agreed terms — the rate and the rhythm are set out up front, rather than left to a market price. That's a large part of what makes private lending more predictable than owning shares.
06 — What moves it
What moves the number up or down
None of this is dramatic, but two factors are worth understanding so the number never surprises you:
- The prime rate (local). A prime-linked return rises when the Reserve Bank lifts rates and eases when it cuts them. Over a full cycle it tends to average out; in the short term it drifts with prime.
- The exchange rate (offshore). The rate on an offshore note is fixed, but because it's held in hard currency, the Rand value when you convert back depends on where the Rand sits then.
Both are ordinary features of the two forms rather than surprises — and both are things a consultant will walk you through against your own plans.
07 — How it compares
How private-lending returns compare
Numbers only mean something next to alternatives. Here's where private lending sits among the options a South African with capital might weigh up — a general picture, not a recommendation:
| Where capital sits | Typical return | Access | Character |
|---|---|---|---|
| Bank savings / deposit | Low, set rate | On demand | Protected, but modest |
| Retail savings bonds | Moderate, fixed | Locked for the term | Government-backed |
| Private lending (local) | ≈ prime + 1% to + 5% | Committed for the term | Steady; not guaranteed |
| Listed shares | Variable, uncapped | Sellable, but volatile | Swings day to day |
The pattern is what you'd expect. A deposit pays the least but hands your money back on demand. Shares can pay more but move with the market, and your capital rides those swings. Private lending sits in between: a stronger, steadier return than cash, without the daily movement of the share market — in exchange for committing the capital for a period. It's why people often use it to balance out a portfolio that's otherwise weighted towards shares and cash, rather than as a replacement for either.
08 — Your number
See your own number
Ranges and worked examples give you the shape; your own amount gives you the answer. The calculator lets you put in a figure — local or offshore — and see an indicative return at today's rates in a few seconds, with no sign-up. When you're ready to go further, you can enquire and a consultant will talk you through the specifics.