Best personal loans for good credit in South Africa
What is the lowest interest rate you can get in South Africa if you have a good credit score? If you want to know your loan options and how to compare personal loans for good credit, this guide will help answer these questions for you.
What is a good credit personal loan?
Credit bureaus in South Africa use slightly different credit scoring models. Equifax and Experian both consider a good credit score to be 670 to 739, while TransUnion places it between 681- 766.
What the lender sees when they see a credit score in this range is a responsible borrower who typically has the following:
- History of paying bills on time. On-time payments are one of the top ways to get a good credit score.
- Good credit mix. Having different types of loan accounts under your name, such as credit cards, car loans, or personal loans helps to build your credit score.
- Fewer loan applications. Too many loan applications and hard credit checks can make it seem like you have money problems.
Therefore, a good credit personal loan is one which represents a lower risk to lenders. As a result, personal loans for good credit have much lower rates and better terms than bad credit loans and average credit loans.
Type of personal loans for good credit
Personal loans for good credit can have some of the following features depending on your preference:
- Unsecured personal loans. No collateral required, but your credit score can still help you get a comparatively low rate.
- Secured personal loans. You can get even lower rates if you put up collateral, but you might lose the asset if you default.
- Variable-rate personal loans. This option offers a lower starting rate but carries some uncertainty, especially if you choose a longer loan term.
- Fixed-rate personal loans. It’s easy to budget for your monthly repayments with this option, but you’ll be unable to save on interest if market conditions become more favourable.
- Joint application. This helps to improve your chances of loan approval and of getting a much lower interest rate.
7 questions to ask when comparing good credit loans
- What is the interest rate? – Compare the base interest rate for at least 3 lenders to find out the lowest. From there, it’s easy to negotiate for a much lower personalised interest rate depending on your exact credit score and other factors.
- What is the total cost of the loan? – This requires you to look not only at the interest rate but the loan fees and charges as well. Fees to watch out for include initiation or origination fees, penalty fees, and ongoing monthly services fees.
- Can I afford my monthly payments? – Our monthly repayment loan calculator for good credit personal loans helps you to choose an affordable option. Make use of the sliders and enter your loan amount and term. Next, click “Calculate Repayment.” Keep in mind that, while a long loan term offers smaller monthly instalments, it increases your interest payments overall.
- Does the loan have any restrictions? – Restrictions apply to how you can use the loan, how much you can borrow, the length of the loan, and repayments terms. Look at these factors and choose a lender who offers the most flexibility.
- What are the other requirements? – Besides a good credit score, your chances of loan approval also depend on meeting other general requirements such as a low debt-to-income ratio, having South African citizenship, and being 18 years or older.
- Does the loan have any benefits? – You’ll certainly benefit from a competitive interest rate, but other lenders offer even better deals. Can you apply for the personal loan online? Also look for discounts on rates, excellent customer service, and quick turnaround time.
- Is my credit score good enough? – Find a lender who offers a prequalification option. They will carry out a soft credit check that won’t affect your credit score. The quote you receive lets you know if your credit score is good enough for the rates and terms you want.
How can I turn my good credit into excellent credit?
If you have a good credit score, you’re a step up from a very good or excellent credit loan which comes with even more favourable options. Here’s what you can do to continuously improve your odds:
- Check your credit report. Ensure your credit report contains updated and error-free information.
- Keep paying off your debts on time. This will keep your credit history clean.
- Reduce your outstanding balance. A low balance leaves you with more available credit and a good credit utilisation ratio – all good news for your credit score.
Apply for a personal loan for good credit today
CompareLoans helps you find and compare popular South African lenders all in one place. With our comparison tables above, all you have to do is click the “Go to Site” button after you have made your final decision. Once you’re directed to the lender’s website, fill out the online application form and upload any required documents.
Frequently asked questions about personal loans for good credit
Where can I get a good credit personal loan?
What other types of good credit loans can I apply for?
How much can I borrow if I qualify for a good credit personal loan and for how long?
Maximum and minimum loan amounts for personal loans are typically between R2000 and R300 000, respectively. For loan terms, the lower and upper limits lie between 12 months and 72 months (5 years), respectively.
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