Find the best personal loans for casual workers in South Africa
Money lending can be a tricky business. To protect themselves, most banks and financial institutions have a list of requirements you have to meet before you can get the extra cash you need.
In most cases, permanent employment is often included in these requirements. If you’re a casual worker who is feeling a little left out, CompareLoans takes a look at the options available for your different employment situation.
What is a casual worker?
The current legislation of South Africa has no definition of a casual worker. However, the term might still be used to refer to a person who works more than 24 hours a month. In a sense, casual workers are part-time workers or individuals who are hired to work for only short periods.
Even so, individuals who work less than 24 hours per month can also be called casual workers. This only goes to show how broad the definition of a casual worker can be. Examples of casual worker jobs include the following:
- Domestic worker/Cleaner;
- Delivery driver;
- Part-time tutor; and
Personal loans for casual workers: How do they work?
Once you qualify, loans for casual workers usually function the same way as traditional loans offered to permanently employed individuals. There are two main options available:
- Personal loans. The loan amount is limited between R2000 and R250 000, although it can be as high as R300 000 if you have good credit and a high-income level. The repayment period typically ranges from 1 year to 5 years or 7 years. In addition, both unsecured personal loans and secured personal loans are available.
- Short term loans. This high-interest-rate option is more suitable for bad credit borrowers. You get smaller loan amounts (up to R8000) that have to be paid over 1 month to 12 months.
4 ways to improve your chances of loan approval if you’re a casual employee
- Compare loans. If you’re a casual worker, you might have a hard time getting your application approved. It’s important to compare the available loan options so you can find a lender with a more flexible approach. You will still have to work harder to convince the lender of your ability to pay back the loan, but it helps if you have a stable financial history and a good credit score.
- Find a co-signer. Do you have a trusted someone who has an excellent credit score and who is willing to cover your payments if you start struggling? Then add them as a co-signer to lower the risk for the lender.
- Secure the loan. A secured loan reduces the risk for the lender, but it also puts you at risk of losing your assets, whether it’s a house or car.
- Negotiate with the lender. If the lender reviews applications on a case by case basis, you might be able to negotiate a loan contract that is tailored to your situation. Also, get in touch with the lender to check if you meet all the requirements in case you’re not sure.
- Calculate your monthly payments beforehand. Use our monthly payment calculator for casual worker personal loans to choose an affordable loan. Start by using the sliding tools to choose your loan amount and loan term. After you click calculate, check to see if the results fit into your monthly budget with other expenses. When you choose an affordable repayment, you increase your chances of passing the affordability assessment carried out by most lenders.
What to do if your casual worker loan application gets rejected?
- Wait until you have a longer employment term. If you’re a casual worker who has been working for a long time, you’re likely to be considered since your financial history is more stable.
- Work on improving your credit score. Before you apply again, improve your credit score by making any current payments on time and getting rid of your other debts to achieve a low debt-to-income ratio. This frees up your cash flow so you can afford a new loan. Also, avoid too many loan applications as they show up in your credit history and lower your score.
- Save for an emergency fund. Slowly work on building your emergency fund, so you have something to rely on when you need extra cash. You can also use your savings or emergency fund to pay for a deposit if you wish to apply for a car loan.
FAQs for casual worker personal loans
Do I qualify for a casual worker personal loan?
You may be able to get approved for a loan if you’re a part-time employee who meets the following general requirements:
– Be a South African citizen;
– Be 18 years or above;
– A regular, monthly income;
– Proof of income documents – bank statements and payslips.
How can I apply for a loan as a casual worker?
You can easily make an online application with CompareLoans. After you find the best option from the lenders showcased in our comparison tables, simply click the right “Go to Site” button.
What are the interest rates for casual worker personal loans?
The rates depend on various factors which include the lender, your credit score, and income level. Some lenders offer low and competitive interest rates if you have a sufficiently high credit score.
What can you use the personal loan for?
Personal loans are general purpose and can be used to pay for home improvements, auto repairs, legal fees, and other personal needs.
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