Short Term Loans In South Africa; borrower can access between R1,000 and R8,000 from the bank at a repayment period of up to 6 months.
Short Term Personal Loans
No one can predict the financial events in the next minute. That is why many money lending institutions in South Africa offer short-term credit facilities to salvage customers in the sunny days. However, financial experts advise that maximum care should be put into consideration when taking the loans. The reason being, the chaining nature to the borrower. The credit quickly eats into borrowers future income sometimes at high cost.
The interest rates charged on them are extremely high. If one does not take precautionary measures, he/she may end up in the vicious cycle of debts.
Who Qualifies For A Short Term Credit In South Africa?
To qualify for any loan in South Africa either through a mobile application or over the counter, the applicant must be:
- A resident of South Africa
- 18 years of age plus
- Have a record of at least three months of earning a salary
The Types Of Short-Term Credits In South Africa
Small loans are mini credit facilities offered for a short period of time. Usually, the lenders gives borrower a maximum of 6 months to repay at a cost of 5% per month. These are the maximum limits according to the National Credit Act. By the end of the 6 months, the interest shall have accumulated to about 30% maximum.
The lender demands that client draw a cheque (personal cheque) which will be deposited the next time client access the money. Borrowers can postpone on the depositing of the cheque upon renegotiation with their lender. However, that will attract more service charges. Client can borrow between R500 and R8,000
Here borrower can access between R1,000 and R8,000 from the bank at a repayment period of up to 6 months. Within a week you should be able to have the facility approved.
Defaulting this kind of credit can lead to a bad credit score rating which will affect future borrowing.
Attaching asset to borrowers credit has made loans in Africa accessible. Borrowers attach their assets like a car log book, title deed or house to the credit to act as the collateral should fail to repay. It is a risky product in case if borrowers fail to pay can lose their property easily. Many banks offer at a range of 10.25% on this credit facility.
Managing The Cost: Most lenders like Wanna, GetBucks, Doodle, Mullah have their interest rates ranging between 19%-22%. The best way to manage the cost of these borrowing is to take the shortest repayment period possible.