Minimum and maximum loan periods vary between 1 months and 10 years. Comparison interest rates vary between 6.55% and 60% p.a. Total interest repayments vary between R685.05 and R844.12 over the life of the loan. *Comparison rate is based on an unsecured loan of R20,000 for a term of 3 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. These rates can change without further notice. All rates quoted are per annum. For more information regarding fees click on "View fees & additional info +" for each product or contact the provider.
Find the best money lenders in South Africa
For every problem, there’s a solution. If you wish to borrow money in South Africa, money lenders are waiting to help you. Whether you want to consolidate debt, buy a car, or cover an emergency, there are many options available to meet your needs. You might also be looking for a small loan or a big loan – whatever your goals, finding the right lender helps you to move past any money problems.
At CompareLoans, we bring you this guide so you can choose the best loan company for your needs. Find out what types of loans are available from money lenders, and how to compare money lenders for best results.
What types of loans can you get from money lenders in South Africa?
A personal loan gives you a lump sum or cash advance that has a fixed repayment period of between 12 and 72 months. Money lenders usually offer loan amounts between R10 000 and R250 000, and the loan can be secured or unsecured.
Secured personal loans require collateral, usually a house or car to secure the loan. However, most personal loans are unsecured, and you need a good credit score to qualify. Personal loans are used to cover general needs, such as home improvement, weddings, and holidays.
Debt consolidation loans are used to pay off your other loans. If you have too many of them and once they’re paid off, you’ll be left with just the debt consolidation loan. That means you have only one monthly payment and you’re paying interest on only one loan which can help you save money if you get a much lower rate.
A consolidation loan can pay for store accounts, payday loans, credit cards, student debt, plus more.
A student loan helps to pay for tertiary education by providing cash which can be used to cover fees, books, accommodation, living expenses and other learning equipment and material. The loans are available for individuals (either a parent or student) with a good credit score and an acceptable income level.
Most student loans are paid off in two stages: First, there are monthly payments to cover interest only. After the student graduates and finds work, they repay the outstanding balance, again on a monthly basis.
Payday and short term loans
Short term loans have higher interest rates and should be paid off quickly, typically within 6 or 12 months. They also limit the loan amount you can borrow since they are meant for emergencies or urgent needs. Payday loans are a type of short term loan that gives you money while you wait for your next payday. Some money lenders offer up to R8000, but it has to be paid back within 30 days.
Money lenders offering vehicle finance in South Africa not only provide new and used car loans, but you can also get money to buy a truck, caravan, boat or classic car. Car loans are usually secured, which means the car you’re buying guarantees the loan and the lender can claim it back if you don’t finish your payments. You can also apply for an unsecured car loan if you have an excellent credit score.
Some money lenders are willing to help you even if you have bad credit or are blacklisted. When you apply for a loan, lenders usually perform a credit check to see if you have been good at paying back your past loans. Loans for the blacklisted and those with bad credit typically have higher interest rates, and you must have a regular, monthly income to qualify.
Where can you find money lenders in South Africa?
Money lenders in South Africa are available in the form of banks, credit unions and various financial institutions. CompareLoans.co.za specialises in online money lenders, and we have several options featured in our comparison tables. Use the information provided in the rest of the article to find the best option. Once you have your final selection, click “Go to Site” to visit the money lender’s website and submit your online application. General requirements for most loans include:
- Minimum age of 18 years;
- Copies of your valid South African ID;
- Proof of income – Bank statements and payslips for the last 3 months;
- A regular, monthly income; and
- Proof of residence.
Comparing money lenders in South Africa
- Eligibility requirements. Whether you qualify or get approved for a loan depends on your income level, credit score, and other requirements set by the lender. Look for a money lender with requirements that you can easily meet.
- Application process. Money lenders who offer easy online applications, fast approvals, and good customer service can make the money lending process more convenient for you.
- Collateral. Ask yourself if you want a secured loan or an unsecured loan. Find out more about secured and unsecured personal loans, as well as secured and unsecured car loans, to find out which one is more suited for you.
- Interest rates. To reduce the total cost of your loan, find the lowest fixed rate or variable rate, you can get with your credit score. Also, check out the APR, which includes the interest rate plus all the fees attached to the loan.
- Loan amounts. Money lenders have minimum and maximum loan amounts you can borrow. Check if the loan amount you want is included.
- Loan charges and fees. Before you sign the loan agreement, check the terms and conditions for all the fees you’ll have to pay. Look out for initiation, monthly service, early payment, and late payment fees that can make your loan too expensive.
- Repayment period. Find out which money lenders can give you the repayment period you want. You can choose a longer term if you want smaller monthly repayments or shorter terms if you wish to reduce the total cost of your loan.
- Loan uses. Make sure the money lender allows you to use the loan for the purpose you want. For example, some lenders won’t approve the use of personal loans for business or educational purposes.
Use our loan calculators to find the best monthly instalment
While you’re still comparing loans, your monthly payment is another important factor to consider. CompareLoans.co.za has created a wide variety of loan calculators, including a personal loan calculator. These are designed to calculate the amount you have to pay every month until your loan is completely paid off.
Simply input your loan amount and term, then click “Calculate Repayment.” To view, the results scroll down to the comparison tables and check what each licensed money lender has to offer. For more details also click the “View fees and additional info” link.
Avoid these 6 mistakes when choosing a loan from any money lender
- Not checking money lender reviews – Avoid unreputable lenders by first confirming if the loan company is a registered credit provider that offers authorised financial services.
- Submitting too many applications – Too many hard enquiries on your credit report can lower your credit score.
- Not fixing errors in your credit report – Fixing errors helps improve your credit score so you can negotiate for a better interest rate.
- Borrowing more than you can afford – This can result in a vicious debt cycle and bad credit.
- Choosing a term that’s too long – You may get small and affordable monthly payments, but the total cost of your loan can end up being too high.
- Failing to read the terms and conditions of your loan contract – It’s best to fully know what you’re getting yourself into before signing the agreement.
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