Search Results for: personal loan

It’s almost inevitable that we will come across situations where we need a little extra cash. A lowest-interest personal loan in South Africa is the best way to finance an emergency, a car, or even a holiday – get approved for up to R250,000 with a low rate starting from 9.75% and a term of up to 6 years.

What is a personal loan?

A personal loan is a loan obtained from a lender, typically a bank or credit union. To repay the money you borrowed, you must make monthly payments that include interest as well. These payments typically take many months to repay.

1. You can borrow between R2000 and R300,000
2. You can pay back the money over a period that is between 1 month and 84 months (7 years)
3. The funds can be used for personal purposes. The loans can be used for any purpose, from renovating a home to buying a car to consolidating debt to paying for wedding expenses. The choice is yours.

How do personal loans work in South Africa?

Generally, the process of taking out a personal loan involves these steps:

1. Comparing loans

Loans come in different types. The various types of loans offer different benefits and disadvantages, as well as different terms and conditions. It is imperative that you compare your options so you can select the most appropriate personal loan. Take your time to navigate through this page to find out the best available loan providers in South Africa. 

2. Checking the requirements to see if you qualify

In addition to finding a product that fits your situation and budget perfectly, you must make sure that all of the information and documentation you need is available for the application. In addition to meeting certain requirements, you must also be of a certain age or have a certain income.

3. Approaching the lender and making an application

You can then make an application with the appropriate lender if you qualify. An online check-in, a telephone call, or a branch visit are all options.

4. Getting approved and agreeing to the terms and conditions

Upon approval of your application, a lender will make you an offer. This is the credit agreement between you and the lender. In addition to the amount you will receive, the interest rate for the loan, and how long you will have to pay it back, you’ll see the exact terms of your loan. As soon as the lender accepts your offer, the money is transferred into your bank account.

5. Paying back

Monthly payments are typically made to repay debt. The amount of each payment depends on the total cost of the loan. Along with duration and monthly repayments, other terms and conditions may apply, such as early repayment penalties.

What are personal loan interest rates in South Africa?

Lenders determine the interest rate on your personal loan. The agreement to the terms of the contract also includes your agreement to this set interest rate. According to the National Credit Act Regulation, the maximum interest rate in South Africa is 27.50 percent per annum.

The interest rate varies from lender to lender. However, they can be defined as either fixed or variable. Typically, your lender will start charging you interest from the date that the loan is drawn down into your bank account.

Fixed-rate vs. variable rate

The interest rate on a loan can either be fixed or variable. A fixed-rate remains the same throughout the life of the loan. Variable rates, however, can either increase or decrease at any time. Variable rates behave in this way due to the Prime Market Rate (PMR).

In South Africa, the PMR is used to borrow money from the Reserve Bank of the country. Generally, fixed rates are safer because you always know how much you will pay each month. Normally, a bank charges the prime market rate plus an extra percentage, which they call interest. In this way, you can budget your finances in advance. If, however, you choose a variable rate for your loan, you stand a chance that the interest will go down, which will reduce your repayments.

However, predicting the future is difficult or even impossible. In addition, the interest rate can rise, resulting in higher monthly payments.

Which bank has the lowest personal loan interest rate

After intense research and financial analyses, the following credit service providers came up top of the list of on radar;

1. African Bank

This is one of the people’s favorite banks. African Bank is a locally controlled bank and it is currently under the curatorship of the South African Reserve Bank.  Though they provide loans with fluctuating interest rates, they operate with one of the best terms.

2. FNB loans

Operating with a fixed interest rate of 12.75%, FNB ranks as one of the best credit providers in the country. Apart from the fact that they grant loans with cheap interest rates, they operate with a flexible loan term too.  Having been in existence since 1838, FNB is known for providing various banking services to millions of customers in South Africa. 

3. Capitec loans

Listed on the JSE, the Capitec bank is one of Africa’s largest diversified financial services providers. Committing a great percentage of their resources on finding local solutions to uniquely local challenges. They are driven by the zeal of adding value and improving the lives of Africans. To this end, the Capitec loan offers a fixed interest rate of 12.9%.

4. Ned Bank

Ned bank is a South African-owned Bank. It has a good track record in South Africa. Though they operate with a flexible interest rate, they’ve proven to provide one of the best loan services over time.

5. Absa loans

Another great option for financial providers with cheap interest rates is the Absa financial group. Irrespective of the fact that it does not fix their interest rates, one look at their repayment term will convince you.

Conclusion

A lot of people don’t know this but it is possible to save a portion of your income while still paying up your loans. By repaying your loan amount at a far lesser interest rate, you get the financial flexibility to possibly save or spend that portion on other things

Are you thinking of applying for a personal unsecured loan? Different South African lenders offer a wide range of loans, and the details can be somewhat confusing. We’ve broken it down for you in this article and make it easy to understand what unsecured personal loans are all about.

What exactly are unsecured personal loans?

The term “personal loans” is probably already familiar to you. A personal loan is like borrowing money from a financial institution such as a bank or credit union. You can use the money for anything, including paying for a wedding, university fees, and home improvements.

What does it mean when a personal loan is unsecured?

In South Africa, unsecured loans are popular and considered the best option for those seeking to build credit. This simply means that when you take out the personal loan, you do not need to pledge your valuable property as collateral. Therefore, you can apply for and receive the loan without securing it with your property (such as your house or car).

A personal loan that does not require collateral or security is known as an unsecured loan. A credit provider lends you money based on your affordability. As long as you seem responsible and have a stable income, you have a good chance of getting unsecured debt in South Africa.

How do unsecured personal loans work?

As mentioned above, with an unsecured loan, there is no need to use your property or assets as security. Therefore, if you fail to repay the loan, you won’t lose your property. However, unsecured loans are usually expensive because of their high-interest rates.

Lenders offer higher interest rates to boost their chances of getting their money back if you fail to repay the loan. Last but not least, unsecured loans may also have a limit on the amount you can borrow.

What do i need to apply for an unsecured loan

To determine your credit history, lenders require basic documentation for any loan. In other words, they don’t want to give money recklessly to irresponsible customers. In most cases, credit providers will need the following:

Before applying, you need to check if you qualify. General requirements include:

1. South African ID;
2. a minimum monthly income (depends on the lender);
3. proof of income. (Usually, bank statements or payslips issued in the last 3 months);
4. a good credit history; and
5. minimum age of 18 years

Depending on the lender, they might require more documents in order to approve your unsecured loan. Having chosen a reputable and licensed finance company, you can log on to their website. 

General overview of unsecured loans in South Africa:

1. The lowest amount you can borrow: R1000
2. The highest amount you can borrow: R350 000
3. Loan term: You usually have between 1 month and 84 months (7 years) to repay the loan.
4. Interest rate: The maximum interest rate for personal loans in South Africa is 27.5% per annum.

There are several types of unsecured loans, including personal loans, payday loans, and credit lines.

How to choose the best-unsecured loan for you

You might find it helpful to look at the following factors when you’re looking for an unsecured personal loan that suits your needs:

1. Interest rate 

The rates for an unsecured loan may be higher, but there are still options for affordable loans. You also need to determine if you want to have a fixed or variable interest rate.

2. The amount of money you can borrow 

In this case, there are two things to keep in mind. First, you need to decide on the amount you can afford to borrow. The next step is to find a loan that gives you the money you need.

3. Other costs associated with the loan 

You can keep the total cost of your loan low by choosing a loan with a lower APR (Annual Percentage Rate). In addition to the interest rate, the APR includes other charges, such as service fees and initiation fees.

4. Additional features 

In order to do this, you need to gather as much information as possible about your loan of interest. Depending on the loan, you may have to pay for credit protection that covers you if you die, lose your job, or become disabled. If you pay your loan off faster, another lender may charge you an additional fee.

When is the best time to apply for an unsecured loan?

A benefit of unsecured loans is that you can use the money for whatever you want, and you do not need to pledge your home or car. It is, however, wise not to take out a loan unless you really need it.

Don’t forget that borrowed money isn’t free. Interest must be paid on the loan. Even so, there are times when taking out a loan can be beneficial. The following are examples of reasonable times to apply for an unsecured loan:

1. When you have an emergency

There are many types of emergencies. You should never hesitate to borrow money when needed to cover a family or medical emergency.

2. When you want to buy essential items

 Making your life easier may require you to regularly use something like this. Laptops, schoolbooks, and electronics are examples. Even after your car breaks down, you can use the money to fix it.

3. To pay for something that brings value to you

An important holiday or wedding could be planned. In most cases, they are expensive but worthwhile, and you may need some financial assistance to pay for them.

4. To invest in something that brings profit

 You can use a personal loan to invest in something that will make you more money.

5. To consolidate debt 

 In order to consolidate debt, unsecured personal loans are a good option. You can use the money to pay off all your existing debt, leaving you with only one loan that is easier to manage.

Comparing secured and unsecured loans

The main differences between the two types of loans can be explained using the following points:

1. A secured loan, such as a car or home loan, requires you to use your home or car as collateral. Unsecured loans, however, do not require such security.
2. There is no risk of losing your property if you take out an unsecured loan. When you fail to repay a secured loan, you can take your house or car as collateral.
3. The interest rates on unsecured loans are likely to be higher than those on secured loans.
4. Unsecured loans may limit the amount of money you can borrow. The requirements for unsecured loans are stricter as well; for example, you may not be approved if your credit score is poor.

Advantages of unsecured personal loans

When you borrow wisely, you also weigh the pros and cons of the loan you intend to take out. The following are the main benefits of unsecured personal loans:

1. Security is not required. Therefore, you won’t have to worry about losing your valuable assets.
2. With an unsecured loan, you can use the money however you like.
3. Applying for an unsecured personal loan is easy if you meet all requirements. Generally, the application process can be completed online by filling out an application form.

Disadvantages of unsecured personal loans

However, unsecured loans are also associated with the following disadvantages:

1. Typically, they have higher interest rates.
2. In some cases, you may not be able to borrow larger amounts.
3. The loan may need to be repaid over a short period of time.

Conclusions

For individuals looking to build credit profiles, unsecured loans are the best option in South Africa. In South Africa, you have a good chance of obtaining unsecured debt if you have a stable income and seem responsible.

With the ever-increasing prices and unstable inflation rate in the country, many South Africans find themselves in an economically difficult position. If you ever find yourself in need of cash, a Personal loan could be a great option to finance your emergencies.

A personal loan is designed to provide simple financial solutions, which are designed to be easy, quick, and simple. This article aims at helping you discover how personal loans work, how to get them, and how they work.

Ultimately, this guide will give you the confidence to choose a loan that will meet your needs and cover any financial gaps you might have. Let’s dive in.

What is a Personal Loan?

Taking a personal loan means getting money from somewhere to cover your personal expenses. These expenses might include home renovations, medical expenses, wedding expenses and many more. Some of the basic characteristics includes;

1. You can borrow between R2000 and R300,000
2. The loan is repayable over a time frame ranging from one month to seven years.
3. The funds can be used for general purposes. People use these products to renovate their homes or purchase cars, while others use them to consolidate debt or cover wedding expenses. It’s all up to you.

Terms Relating To Personal Loans.

In order to ensure a smooth loaning experience, it is important to be familiar with the following terms.

1. The principal amount

This is the total that you initially borrowed, excluding any interest payments or other charges. For example, an R10,000 loan becomes an R3,000 loan by paying off the following amount: R7,000.

2. Interest rate and Loan term

This is the time you have to pay off the loan. Loan terms typically start from 1 month and go up to 84 months. The interest is the fee that lenders charge customers when they borrow money. The interest rate is given by the lender and expressed as a percent.

3. Monthly Repayment

Your monthly repayment is a payment you make to the lender each month in order to pay back your loan. Completing your repayments reduces your principal balance and covers interest and other charges associated with the loan.

4. APR

The annual percentage rate is also known as the comparison rate. It includes interest as well as all other debt charges expressed as a percentage rate.

How do Personal loans actually work in South Africa? 

The process of taking out a loan of any kind can be tricky sometimes. Applying for a personal loan typically requires the following steps, especially if you don’t follow these steps.

1. Comparing loans.

There are different loans. Each type offers various benefits and disadvantages and different terms and conditions. The first step involves comparing your options so you can choose the best personal loan for you. 

2. Checking the requirements to see if you qualify.

Once you have found the product that fits perfectly into your budget and situation, move to the next step. Make sure that you have all the information and documents needed for the application process. You should also meet certain requirements such as those concerning age and monthly income.

3. Approaching the lender and making an application.

After you qualify, you can then apply with the appropriate lender. This can be done online, over the phone, or at a branch.

4. Getting approved and agreeing to the terms and conditions^..

A credit contract is a legal agreement between you and the lender. It describes information such as the amount of money you’re receiving, the interest rate for the loan, and how much time you have to pay it back. Once the agreement is signed, the lender transfers the money to your bank account, ready for your use.

5. Paying back.

Debt is typically repaid in monthly payments. The amount of each payment depends on the total amount of the loan. In addition to the duration and monthly repayment, other terms and conditions may be involved, such as penalty fees for early repayment.

Types Of Personal Loans.

Licensed lenders offer a range of personal loans, so your choice will depend on several factors including what you want to use the money for, how much you earn each month, and your credit history.

Generally, these are the types available:

1. Secured Loans.

 A secured loan allows you to borrow money when you use a valuable asset such as your car or home to guarantee the loan. By using collateral, you can borrow more money and secure lower interest rates and fees. However, you risk losing the asset if the loan is not paid back as agreed.

2. Debt Consolidation Loans.

You can use this type of loan to pay off your existing accounts. This leaves you with only one easy-to-manage account that might save you from interest and other charges.

3. Lines of credit.

These come with a maximum credit limit. How much you pay back depends on how much you have used. Lines of credit are also for general purpose use.

4.Unsecured Loans.

These loans require no security or guarantee, and they are for general purposes.

5. Student Loan.

These help you pay for your education and other related expenses.

6. Overdraft.

If your bank balance is low, you can still withdraw a limited amount of money from your account.

Personal Loan Interest Rates.

As you agree to the terms of the contract, you also agree to the interest rate that the lender has for your personal loan. The maximum interest rate for a personal loan in South Africa is 27.50%.

In general, interest rates vary from lender to lender, but they can be classified as either fixed or variable. In general, your lender will begin charging you interest after the loan has been drawn down into your bank account.

How Do You Qualify For A Personal Loan.

The general requirements for qualifying for a personal loan in South Africa include:

1. Minimum age of 18 years;
2. You should be employed or self-employed;
3. Prospective applicants must be earning a regular, monthly salary or income; and
4. Having South African citizenship or a South African residence permit.

Required Documents For Applying A Personal Loan.

The following documents must be available to increase your chances of loan approval.

1. A valid South African ID;
2. 3 months’ payslips or bank statements;
3. Proof of residence, e.g. water bill; and
4. For a secured loan, you need documents that show proof of ownership for the asset you’re using to guarantee the credit.

How to Apply For A Personal Loan In South Africa.

Before applying, it is helpful to re-read your options one more time. Major points to consider before applying includes;

1. How much do you want to borrow?
2. Which monthly repayments are affordable for you?
3. Whether you are choosing a secured or an unsecured loan depends on whether you already have an asset or plan to use the credit to purchase an asset. If not, then an unsecured loan may be a better option.
4. Is a fixed-rate loan right for you? If you want to budget accurately, a fixed-rate loan is good because your repayments stay the same throughout the loan. On the other hand, a variable interest rate may offer a better interest rate if the interest rate drops. 

After having considered the above point, it is important to note that the application process can be either online or offline. 

Offline Application.

Offline loan application is the oldest form of loan application method. This application process involves actually visiting the physical branch of the loan facility to apply in person. Prospective applicants are expected to bring all necessary documents to the branch for assessments.

Online Application.

Some credit providers require their applicants to submit their applications online via the internet. The application process entails accessing the official website of the loan platform and going through the application process. The loan provider’s database stores all required documents in the application process. 

Top 5 Personal Loan Providers In South Africa.

A personal loan application involves performing a little research and comparing available options. These are some of the individuals and companies that are thought to provide reliable services in the area of personal loans;

1. Nedbank Loans

Nedbank is a top financial institution in South Africa. The organization works very hard to ensure top-quality services for its members. They Offer wholesale and retail banking services and insurance, asset management, and wealth management. With Nedbank loans, prospective customers get;

1. Personal loans ranging from R2 000 to R300 000.
2. Flexible repayment periods from 6 up to 72 months.
3. Monthly repayments debited from your bank account.
4. Easy online loan application process.

2. Direct Axis Personal loans.

Direct-axis is a proudly South African business. Serving for over the last 25 years of direct-to-consumer insurance brokerage expansion. It is one of the largest and most successful direct marketers in the financial services sector. Serving not only in South Africa but on the continent. Prospective applicants get to enjoy;

1. A personal loan from R1000 up to R250 000.
2. Interest from as low as 15%. 
3. Fast, paperless application process.
4. Decision in seconds with cash in your account within 24 hours.
5. Flexible repayment options; choose from 12 to 60 months. 
6. Fixed monthly repayments. 

3. Capitec Loans.

Listed on the JSE, the Capitec Bank is one of Africa’s largest diversified financial services providers. Committing a great percentage of their resources on finding local solutions to uniquely local challenges. With Capitec loans, prospective customers get;

1. Get up to R250 000 over 1 – 84 months.
2. Prospective applicants get to choose between the amount they want, the monthly installment that suits their pocket. They can also choose the option that gives you the lowest interest rate.
3. Credit is approved in minutes, and the money is available immediately. 
4. Make fixed monthly payments.

4. RCS Loans.

RSC Group is super passionate about enhancing people’s lifestyles. They are working towards achieving this by offering a range of responsible consumer finance solutions that are innovative, accessible, and desirable.

Prospective applicants get to enjoy;

1. A cash loan from R2 000 up to R250 000.
2. Interest from as low as 15%. 
3. Fast, paperless application process.
4. Decision in seconds. Cash in your account within 24 hours. 
5. Flexible repayment options; choose from 12 to 60 months.
6. Customer Protection Insurance.

5. African Bank.

African Bank Limited is a South African retailer offering a variety of financial products and services. South African Reserve Bank controls the bank and it operates mainly in South Africa. 

Prospective applicants get to enjoy;

1. Loans up to R250,000. 
2. Terms between 7 months and 72 months. 
3. Super easy application.
4. Flexible terms and loan conditions.

Conclusion 

Loans for personal use are a good way to ease personal financial problems. Whether it’s medical, home improvement, or general maintenance. Technology has made every process so convenient for our convenience. You can apply for Personal funds from the comfort of your home. That’s pretty cool, isn’t it?

The fact that we see automated machines and programmes to be more accurate than the human brain has drastically improved calculation errors. The personal loan calculator is a major financial tool used to calculate numeric equations relating to credit services. 

In this article, we will look at the meaning, how to use it and all there is to know about this tool. 

What is a Personal Loan Calculator?

A personal loan calculator operates like every other loan calculator. The only outstanding difference is they programmed it to calculate personal loans only. They also configured the interface in such a way that it only accepts personal loan data and information. 

Benefits of using a Loan Calculator?

If you’re about to apply for a personal loan, then you should know there are key factors to be taken into consideration. Trying to compare and calculate all the equations associated with a personal loan can be a tedious task. With the Loan calculator, you get the following benefits;

Loan Interest Rates

This is one of the most important benefits of the loan calculator. It calculates the interest rate that you will need to pay to the lender within a blink of an eye. Since the loan interest rate depends on a variety of factors, you can always alter the numbers and select the best interest rate for you.

Apart from Personal loans, calculating the interest rate for big loans like home loans and business loans can be a strenuous task if attempted manually. The loan calculator not only executes this problem with ease, it provides a more accurate result.

EMI’s And The Loan Tenure

EMI is a term for equated monthly installment (EMI). EMI is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. The Personal loan calculator also helps in calculation of EMIs and most suitable tenure of the loan. 

Therefore, not only will you be able to decide the perfect value of EMIs, but also the number of EMIs that you will need to pay depends on the tenure of the loan.

Simplify Calculation 

Most times manually calculating loan equations can subject the result to error and numeric mistakes. Loan calculators are usually automatic and known to be accurate with results. 

The result of this calculator solely depends on the inputs information the user keys in. It automatically uses these inputs to calculate, measure and provide accurate results within a blink of an eye.

Real-time Information 

The interest rate point of every country changes from time to time. They automatically install the interest rate in the loan calculated programme as a basis of calculation. 

The automatic procedure takes place immediately after the user is done, imputing his/her desired loan data into the calculator’s interface.

Loan Eligibility 

The loan calculator requires a lot of information such as your income credit rating. After assessment, it will tell you whether you are eligible for a loan. Finding out the loan eligibility before applying for the loan will save you a lot of time and resources.

Human Friendly

Most loan calculators are usually very easy to operate and navigate. Technological advancement has also made the resulting communication process to be presented to its user in a comprehensive form. 

Mobile Friendly 

A great percentage of the world population has access to the internet. Now, with an online loan calculator, there is no need to use a computer when you need to compare different loan deals. If you find an offer that you like, just create a bookmark for the web page.

How to use a Loan Calculator

Using a loan calculator is as easy and direct as using a regular mathematical calculator. The only major difference between these two programmes is the data input and the result they provide. The process of using this calculator is as simple as;

• Opening the loan calculator interface.
• Typing your information and other required data in the fields
• Double checking the information to ensure their values are correct.
• Clicking the “Calculate” button and watching the magic happen.

The result of a loan calculator solely depends on the inputs information the user keys in. It automatically uses these inputs to calculate, measure and provide accurate results within a blink of an eye.

Conclusion

Since every digit in finance is very important, be sure to put in measures to reduce the risk that comes from arithmetic errors. By using this you automatically reduce your chances of making an arithmetic mistake. Also, using a loan calculator gives you a clear overview after efficiently comparing the data you provided it with.

More often than not, we get caught up on a financial tightrope. Situations occur that require emergency funding. Loans taken out to sort personal needs are called personal loans. The last thing we need during this rush hour is a lagging credit option. What would really soothe us at this point is a loaning option that is fast and reliable. In this article, we will be looking at the ins and outs of the term ‘Personal loan’

What is a Personal Loan?

A personal loan as the name implies is a form of loan that is taken to cover all sorts of personal expenses. These expenses might include home renovations, medical expenses, wedding expenses and many more.

Personal loans can be obtainable at banks, credit unions and last but not least, online lenders. Of Course just like every other form of loan, interest and additional fees are charged on the loan amount. Though these rates and fees vary greatly depending on the financial company. 

Types of Personal loans

The different types of personal loans are

• Debt-consolidation loan: rolls multiple debts into one new loan
• Co-signer loans: a loan you need a cosigner to qualify for 
• Secured and unsecured loans (unsecured are more common)
• Fixed and variable rate loans (fixed are more common)

Where can I get a Personal loan?

Getting a personal loan can be a pretty easy task depending on the amount. You can find a Personal loan in the following places;

• Your bank or credit union
• A peer-to-peer lending site
• An online loan provider
• A referral from a friend or family member
• A private loan from an investor 

Benefits of a Personal loan

Personal loans are a type of installment debt that allows you to obtain a lump sum of funding. Below is a brief list of expenses you might use a personal loan to pay for:

• Moving expenses
• Debt consolidation
• Medical bills
• Wedding expenses
• Home renovations or repairs
• Funeral costs
• Vacation costs
• Unexpected expenses

This form of loan is literally different from other types of loans. Other types of loans include mortgage loans, student etc. Just like the personal loans, they have their specific purpose they fulfill.

Requirement for obtaining a Personal loan

Getting a personal loan in South Africa is easier when you are prepared. The requirements process for a personal loan might differ. This solely  depends on the financial provider you eventually decide to go with. The following requirements are considered vital and apply to almost all financial service providers in South Africa;

1. Valid South African ID
2. Proof of income
3. Schedule of monthly household income and expenditure
4. Proof of address (A bill in your name which quotes your address)
5. Offer to purchase
6. Bank statement

Lastly it is important to note that, to qualify for a loan, you must both reside and work in South Africa. That being said,  are you in need of a loan and have all these documents available? If yes, then consider yourself a step closer to getting your desired amount in no time.

How to apply for a Personal loan

Application process for a personal loan solely depends on the financial provider you decide to go with. Some finance providers require prospective lenders to apply offline. This application process involves actually visiting the physical branch of the loan facility to apply in person. This application process requires applicants to bring all necessary documents to the branch for assessments.

While some credit providers require applicants to tender their application online via the internet. This application process involves visiting the official website of the loan platform and going through the application process there. In this application process, you can send all required documents to the loan provider’s database for assessment. 

Additionally, some loan providers are so convenient that they offer prospective applicants a dual application system. In this system, prospective borrowers can either apply in person or online.

Conclusion 

Getting a Personal loan can go a long way in mitigating personal financial emergencies. Be it for health, home or maintenance, technology has eased literally every process for our convenience. Now you can access Personal funding from the comfort of your home provided you possess all the needed requirements.

Someone could have told you that getting a loan from a private lender is better than from a traditional lender. Sometimes, it’s true, because traditional lenders (banks, other financial institutions) might have a higher interest rate for their loans. For whatever reason you need a loan, it’s wise to select the best option of loan you see. Who private personal loan lenders are, how they make money, etc are all-inclusive in this article.

Who are private personal loan lenders in South Africa?

Before getting a loan from any private lender, you might want to know who you are dealing with. Private personal loan lenders are the loan lenders that the government doesn’t own. They are lenders who are not government owned in South Africa. Therefore, the private personal loan is the loan you can get from a private lender.

What are the things I must know about private lenders?

There are things you must know about private lenders before borrowing from them. Some of these things will help you weigh your options appropriately before getting a loan from them.

The following are what you must know about private lenders:

1. You might have to pay a higher interest rate for loans if your credit score is low
2. Compare and contrast options of different lenders to make sure you have the best deal
3. Private lenders offer personal loans you can use for any purpose
4. These private lenders usually have flexible borrowing requirements

What are the private loan lender options I can explore?

There are some private loan lenders that can offer you a loan. The loan options they offer will help you weigh your options of the lender you prefer.

The following are other private loan types you can explore:

Peer-to-Peer (P2P) Lenders

Peer-to-peer lenders offer personal and business loans. They are like Lending Club and Prosper Match. They usually have investors over an online platform. Because of this, they handle every aspect of the loan transaction. They do this so that borrowers and investors won’t have to interact.

Peer-to-peer lenders sometimes help you find a lower interest rate that a traditional lender might not do. They can also make it easier for you to borrow with a not-so-good credit report. However, for credibility sakes, they check your credit score before giving you a loan.

Individuals

There are some loans you get from people you know. This loan type might not be all that formal. Your friend or a family member might give you a loan if they have extra cash.

The following are what you can get with this type of private loan:

1. Lower interest rate
2. Shorter or longer repayment terms than a bank would give you
3. You can stop or reduce repayments during financial emergency

In order to make your lender trust you with the loan. You can have an honest conversation with your lender on what to expect from the loan. To make it a bit formal, you can get the loan agreement in writing. Clearly state the amount, repayment terms and interest rate. If need be, state the potential use of a collateral. Besides that, you can equally state a third-party service that will report your payments to the credit bureau. This report will help give you more financing options in the future as your credit score gets higher. 

Private mortgage (Real estate lenders)

Brokers and private lenders who specialise in real estate offer home and real estate loans. They sometimes offer these loans to borrowers who have bad credit if they think it will be profitable. However, they check the credit score and income of borrowers before they offer such loans. Investors who regularly buy and sell homes gain a lot from working with these private money lenders.

How do private lenders make money in South Africa?

In South Africa, private lenders loan out money to make more money. They usually give out these loans with collaterals that could have more worth than the actual amount they give you. Because of this, they will earn more money than they borrowed you if you cannot repay the loan. Besides that, they also make their money when you repay the loan in installments and with interest.

Conclusion

Private lenders offer you personal loans for various purposes. Their loans actually work like that of the banks’ and credit unions’. While borrowing, do not neglect the community banks or local credit unions. They might offer you loans when you have a bad credit score. However, while borrowing from any private lender, avoid any form of a loan that is too good to be true. Some of those options could worsen your financial problems.

Loans help us in the time we do not have enough money to make expenses. There are some unforeseen expenses that could come our way when we have little or no money to solve them. This is when taking a loan is the most reasonable thing to do. For you to get a loan, you must have a good credit score. You can get a personal loan from any financial institution in South Africa. The leading banks offering personal loans in South Africa, the requirements and so on are all-inclusive in this article.

What is a Personal loan?

Personal loan is the type of loan you can borrow from a financial institution. Most of the personal loans you can get are unsecured. This means you don’t need to provide a collateral to get them. While secured personal loans are the ones, you must provide a collateral to get.

However, the lenders of the personal loans decide whether to give you a personal loan. For them to decide this, they will check your credit history, credit score, debt-to-income ratio and your free cash flow.

If your credit history is not good (positive) they will offer you a secure loan (loan with a collateral). You can then use your home, car, business, or any other asset that you own.

What are the requirements for Personal loans?

1. A clear copy of your South African identity card
2. Be 18 to 65 years old
3. Provide your residential address
4. Payslips as a proof of income or 3 months’ recent banks statement 
5. Be an employee with a permanent job or a self-employed individual
6. Earn at least R3,500 monthly from a valid bank account
7. Possess a valid passport with a work permit (for non-South African citizens)
8. Sometimes you have to provide a guarantor

What is the maximum or minimum amount that I can borrow from Personal loans?

Before getting a loan, know whether the financial institution you’re targeting offers the amount of loans you need. This helps you to know whether to look for an alternative lender. For personal loans, the minimum and maximum loan amount surely differ in financial institutions. However, usually the minimum amount of personal loan is R1,000. Whereas, the maximum amount of personal loan is R250,000.

How can I apply for a Personal loan?

Applying for a personal loan is easy once you already have a lender you prefer. Many banks and other financial institutions offer Personal loans across South Africa.

The following is how you can apply for a personal loan: 

1. By visiting the branch of the financial institution you prefer:

Once you arrive, request for a personal loan and follow the directives they will give you.

2. Request for a personal loan online

Today in South Africa, you can apply for a personal loan online. You wouldn’t need to be present in any of your lender’s branches to apply for a loan.

All you need to do is:

1. Have a smartphone, tablet or a personal computer with a good internet connection.
2. Visit your lender’s website.
3. Then apply for a personal loan
4. Fill out the loan application form online
5. Provide all the personal details they need

Note: Make sure you provide all the requirements they need from you. You can always contact them by phone call or email for further inquiries.

What is the interest rate for Personal loans?

You must know the interest rate that the personal loan you want to get attracts. This will help you know whether you can afford to pay it back. The interest rate on personal loans is  24.5% per annum.

How do they calculate interest on a Personal loan?

Lenders calculate your interest rate according to the information they get from your credit history. They can also check your monthly income and the amount you want to borrow and other things.

Are there any additional fees on Personal loans?

Verify if there are additional charges on the personal loan you want to get. They do not include these additional charges in your interest rate. Additional fees come as initiation fee and monthly service fee. Because of this, know if you can pay them along with your loan and interest. 

However, additional fees on personal loans differ across financial institutions. Some financial institutions have additional fees on their personal loans. While some others do not have additional fees. 

Initiation fee and monthly service fee.

How fast can I get the Personal loans?

The financial needs you have would not give you enough time you need to get things right. Because of this, know how fast you can get a personal loan.

Usually, you’ll get the personal loan once you meet the criteria and present all the requirements your lender needs. However, once you successfully apply for the loan, you will get the loan within 24 hours (one day).

What is the repayment term for Personal loans in South Africa?

Lenders usually prefer applicants they see as a low credit risk. These kinds of applicants are those who usually repay their loans and bills on time.

Personal loans usually have a minimum repayment of 12 months, and a maximum repayment period of 72 months.

What are the personal loans that determine how I make my repayments?

There are some personal loan types that surely determine how you make your repayments.

These types of personal loans are: 

1. Fixed-rate loans:

This is the type of personal loan which your rate and monthly payments don’t change.

2. Variable-rate loans:

Here, your rate and payments can change. This change happens as market interest rates change.

What happens if I cannot repay a personal loan?

There are consequences you will face if you cannot repay your personal loan.

The following are the consequences you will face if you cannot repay your personal loan:

1. It will affect your credit score
2. Failure to repay your personal loan will affect the credit score of your guarantor
3. You will face legal action by your lender

Can I repay a personal loan early?

Some borrowers would prefer to repay their personal loans early. They repay their loans early, and usually immediately they get the money in full. However, some lenders still charge a fee for paying off your loan early. The lenders want to make money off your loan as interests. So paying off your loan early would deny them the money. 

What are the different uses of Personal loans in South Africa?

Personal loan gives the borrowers the liberty to spend it on anything they like. The lenders do not follow-up the use of the loan.

You can use your personal loan for a lot of purposes of which are:

1. You can use a personal loan to fund all your wedding expenses
2. To renovate your home, refurnish, redecorate and so on
3. Fund your expensive family trips and Vaca rooms abroad
4. It helps to fund your medical expenditure
5. Absa

What are the pros and cons of a Personal loan?

There are always pros and cons of any form of loan. Loans help us overcome our needs that need urgent response. But there are some things we have to bear for the loans.

The following are the pros of Personal loans:

1. It is flexible, and you can use the personal loan for various expenses. The lenders do not have to monitor the expenses you would make with the money.

2. Once you have a good credit score, you do not need a collateral to get a personal loan. Because of this, you will not have to risk losing your assets.

Despite how attractive the personal loans are, they surely have their downsides. Anything that has a pro must also have a con.

The following is the list of 5 leading banks that offer Personal loans in South Africa:

2. African Bank
3. FNB
4. Nedbank
5. Capitec

The following are the cons of Personal loans:

1. Personal loans have high interest rates because the lenders see it as a high risk. They see it as high risk because most times they do not give out personal loans with collateral.

2. Many financial institutions will charge you a prepayment penalty if you pay off your loan early. They would like to make up for the interest they will lose if you repay the loan earlier.

Conclusions

Personal loans help you make expenses on whatever you desire. There are no restrictions on the expenses you make with the personal loans. Your good credit score helps to give you the personal loan. Because of this, always ensure that you make your repayments appropriately to maintain that good credit score. This is because you might need another personal loan in the future. And your credit score will equally play the role of letting you get it.

More often than ever we get caught up in financial challenges. Loans are meant to provide a substituting aid to these challenges in whichever form they might occur. These loans could be long or short term. Woolworth’s loans offer this type of service and more. Now let’s take a quick look at how and why Woolworths loan is one of the best financiers out there.

About Dialdirect

Dialdirect is a South African financial services provider and insurer, established in 2003, they have been able to expand and increase their efficiency over time. Dialdirect loans are powered by RCS, a registered credit and authorized financial services provider. The fact that they are not just some old school loan service provider but also an insurance company comes with a whole lot of benefits. These benefits will be studied as we go on.

Requirements for applying for a Dialdirect loan

To apply for a Dial direct loan, you only need a few things to qualify for a personal loan some of this criteria and documents include;

• You must be at least 18 years or older;
• You should have a government-issued SA ID or valid driver’s license;
• Have a working South African bank account;
• Be gainfully employed with an income of R2 000 or more monthly; and
• Produce payslips and bank statements as proof of income.

What is the minimum/maximum you can get from Dialdirect loan?

With Dialdirect loans, applicants have access to loans as low as R1000. This amount is sent to information provided during the application process. The maximum amount of is loan on the other hand is R250,000. It is important to know that the maximum or minimum amount of Dialdirect loan is based on individual circumstances.

How to apply for a Dialdirect loan

The application process for a Dialdirect loan is as easy as 

• Visiting the Daildirect official website
• Clicking and filling the application
• Submitting the required document 
• Submitting the application

After submitting the form, you can wait for a callback or contact Dial Direct yourself.

You can call Dialdirect Personal Loans on 0861 877 772. There is a stand by customer agent always on stand by and ready to attend to your applications or inquiries.

Dialdirect interest rates

Just like every other loan services provider, dial direct performs a credit check before approving and setting your interest rate. One thing is certain though, Daildirect will never charge you an interest rate higher than the maximum recommended rate of 24.75% per annum.

If you happen to have a lower than average credit score, you will be charged a higher interest rate. Below is a brief example of a direct loan and the charges & fees. For a high-risk client with a higher interest rate of 24.75%.

• Amount: R7500
• Term: 24 months
• Initiation fee: R936.50 charged upfront
• Monthly service fee: R69
• Total amount to pay back: R13 248
• Monthly installments:  R552

However, Dial Direct also offers deals with considerably lower interest rates for customers with a high credit score. This allows you to save more.

Features and benefits of Dialdirect loans

Apart from the fact that the application process for Dialdirect loan is super easy and direct, they possess other benefits too. These benefits include;

•  fast, paperless application process
• Decision in seconds
• Cash in your account within 24 hours
• Flexible repayment options; choose from 12 to 60 months
• Fixed monthly repayments
• Free monthly statement via email or SMS
• Optional Customer Protection Insurance
• Interest from as low as 15%

Conclusion

Keeping super simple and easy to access their loans, Dialdirect has been able to soar to the top of the list of financial providers who provide instant loans.  Also aiming at uplifting their standards of living based on their financial needs, Dialdirect loans hope their clients and future clients achieve financial wellness and freedom. 

Low credit score loans are specifically designed for South Africans with poor credit histories, but they tend to be more expensive than traditional personal loans. It is possible to get a loan even if you have been blacklisted, as long as you can prove to the lender that you can afford the repayments or that you have some form of collateral available.

We have expert advice and tips you can use to improve your chances of getting a loan.

What does it mean to have a low credit score?

When you have a low credit score, it simply means that the financial organization thinks you are a potential risk to the service they provide. We also know people with a low credit score as ‘blacklisted’. It is important to note that the term blacklisted can be a misleading choice of words, as there is no so-called official ‘blacklist’. In South Africa, they label people as blacklisted because of failure to consolidate and repay their debts and bills.

How do you know you have a low credit score?

When it comes to bad credit history, you must have a clear understanding of what is recorded against you. To do this, we recommend you request your credit report and carefully review it. Currently, everyone is entitled to a free and full credit report once every year from a credit provider in South Africa.

Apart from that, some companies will provide you with your account status, credit score, and a credit summary for a small fee. Let it be known that no company will ever tell you that you’ve been blacklisted. As such, a list simply does not exist. If you notice any errors, you should address these immediately. It is not uncommon for people to find that there are fraudulent items on their credit reports.

What is a bad credit score

A credit score can be seen as a number ranging from 300-850. This number shows how good your credit rating is. It depends on positive or negative information found in your credit report. This information includes the following:

1. amount of money that you owe;
2. payment history;
3. activity on a bank account;
4. the age of your accounts; and
5. credit checks that have been carried out on you

Additionally, your credit score simply shows all your good and bad financial behavior.

How does having bad credit affect you

Being on a blacklist can stop you from getting a loan to buy valuable assets like motor vehicles, property or even starting up a business. Yet, being blacklisted is nothing to be ashamed of. A great number of professionals have found themselves on a credit blacklist at one point or another. South Africans who are blacklisted can apply for loans to ease their financial concerns.

It is important to know that bad credit does not mean you can’t get a personal loan. Although you may not qualify for the products offered by traditional banks, you might qualify for those offered by other bad credit lenders. For this reason, you should always consider all of your options.

It’s just a matter of being careful about it. You should apply for a loan with different lenders within a short period such as a week or two. In this way, the applications will not have a negative impact on your credit record. In order to apply for credit, you must apply only to credit providers registered under the National Credit Act.

It is important to understand that loan sharks will offer you a personal loan for bad credit, but they will charge you high-interest rates and fees that you may not be able to afford. If your credit record is poor, you should consider bad credit and blacklisted lenders as alternatives to traditional lenders.

Am I going to be blacklisted forever?

The answer to this question depends on whether you are taking the necessary steps to repair your credit history or not. This is what determines how long you will stay blacklisted

How do low credit score loans work?

Lenders specializing in low credit score loans work on a golden rule. A Lender grants this loan on the premises that if there’s a default on any of the payment terms, the value of the assets you have pledged as collateral covers them. They may legally confiscate and sell the valuables to cover the cost of the outstanding loan plus interest.

Which type of loans can I get with a low credit score?

As stated earlier, being blacklisted doesn’t mean you have been totally condemned. There are still a few credit services you can enjoy. Some of these credit services include;

1. Payday loans

Some private lenders offer short-term microloans for blacklisted people. This is a form of unsecured personal loan, but they often come with difficult conditions and higher interest rates. It becomes quite difficult to borrow a large amount because paying back the interest plus the loan amount can become too exorbitant.

2. Secured loans

These types of loans are the easiest to obtain by blacklisted people. With this type of credit, the borrower has to provide an asset that belongs to them as collateral or security. This is so in a situation of default or breach in payback terms, the lender reserves the right to claim the asset. 

You can get this loan against your car, landed property or more. However, it is important to note that you risk losing your property if you don’t pay back the loan amount.

Financial providers that grant loans to the blacklisted 

Here is a quick list of companies that offer loans to people with bad credit.

1. Atara365 Loans

ATARA finance is one of the best credit providers that offer bad credit loans. They offer easy and convenient ways to apply for bad credit loans online. With a high approval rate and minimum info required, ATARA offers a minimum loan of R1000.00 and a maximum of R300 000.00. So, are you struggling to get a loan with bad credit, stress no more as ATARA loan’s got everything you need and more

2. Lime loans

Lime loans operate with a team of highly trained personnel and a combination of machine and technology. They’ve built the platform uniquely to serve their clients, even clients with bad credit.

3. Ezi finance

Are you in urgent need of finance but have a bad credit score? Ezi Finance can hook you up with a credible lending institution. Ezi finance acts as an intermediary between borrowers and credit institutions. With Ezi Finance, you don’t have to be running around sourcing for the best loans for your needs.

Other  financial providers that offer bad credit loans include;

• Blacklistedloan.co.za
• Nexcare Finance

Before actually applying for any of these loans, be sure to do your personal check on the terms and conditions of each of the companies. It’s wise to weigh all the options and choose the best of them. 

Alternative ways to get a Loan if you have Bad Credit

An unsecured loan from a family member or friend is definitely more comfortable for you. If you are blacklisted, you will have a better chance of getting finance as well. If you choose this option, you must ensure that all the details are spelled out in a contract to avoid disagreements and problems later and ideally have the funds transferred to your bank account instead of receiving cash.

Friends and family will be the cheapest and safe option if you need a small payday loan or just a little bit of money to tide you over until payday. You may still be able to get some assistance from your family and friends even if they are not able to lend you money directly. If As long as they have a stable and secure employment income, they can be your co-signers.

If you have a co-signer, you both take out the loan jointly and are responsible for its repayment. By doing so, the lender’s risk is reduced, and you can get a pretty good deal.

Conclusion

If you find yourself in a financially tight corner and in dire need of credit service but you are on the “blacklist”, do not give up hope. There’s a score of financial service providers out there that are willing to provide you with the finance you need.