Minimum and maximum loan periods vary between 1 months and 6 months. Percentage Rates vary between 5% per month and 38% p.a. Total interest and fee repayments vary over the life of the loan. All rates quoted are 30 days. For more information regarding fees, visit or contact the provider.
About getting a payday loan
There are many reasons why payday loans have grown in popularity. A short term loan can be secured quickly and be in your bank account by the end of the day.
You don’t necessarily have to have a good credit score, just a stable income and proof that you are employed or self-employed.
South Africans need to provide the following information when applying:
- Your proof of ID
- Proof of residence, and
- A confirm that you will have a source of income during the loan period
These loans are ideal for people who may not have an ideal credit score and/or need money urgently.
The repayment term can be anywhere between 1 day through to 6 months.
What are the fees for a payday loan?
The loan amount, interest rate and services fees determine the cost, with a ceiling on fees set by the South African government.
Costs and fees for a payday loan include:
- Initiation fee: 16.5% for the first R1,000 borrow, then 10% thereafter
- Interest rate: Typically 5% per day
- Monthly service fee: Around R60 per calendar month
- VAT: 15%
Some lenders charge a little more, others a little less. As you can see from the repayment table above, most lenders are very similar in costs.
Should you get a payday loan?
Payday loans are ideal for South Africans that find themselves in an emergency or urgent situation and are not able to get help from family or friends. Otherwise, burdening yourself with debt is not recommended. Typical reasons for a short term loan:
- Medical emergency
- Repairing an asset which is crucial to running a business and to prevent the loss of income
- Paying for unforeseen expenses
To reiterate, payday loans should not be seen as an addition to your income. They’re expensive and take away from your ability to buy tomorrow. It is also not in your best interest to get comfortable and to spend your loan on leisurely activities.
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