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What are the Different Types of Loans in South Africa?

When needing financial help to accomplish a goal, it’s of paramount importance to understand every aspect of this topic. No matter the kind of need you intend to cover, you will find a loan specifically made for it. The key to take advantage of a loan is to know about the different options to be able of choosing the right one. My intention in this article is to path the way for you to have easy access to your perfect loan. So, let’s start dealing with the different types of loan you can get in South Africa and how everything works to simplify the process for you.

How can I check if a South African loan company is legitimate?  

Clearly, the first thing we must cover refers to legit loans. Being aware of the many problems related to fraud in the lending market, it’s important you know there are companies not working under South African laws. In order to know if you are entering a legal loan contract, you have to make sure the company works under what’s established by the NCA (National Credit Act). So, by just checking that company is regulated by the NCA, you’ll know your loan will be legal.

Are shark loans legal in South Africa?     

Shark loans is a day-to-day issue here in South Africa. Due to the necessity of getting fast approval, South Africans feel tempted to apply for these loans not completely understanding what they are about. Shark loans are not only illegal but also, they pose big danger for those who take them. As people offering these loans don’t apply to NCA regulations, interest rates and cost are much higher than in regular loans. In turn, borrowers can easily find themselves deeply indebted in a short time. This is the main reason why we strongly recommend you check your lender is properly registered and authorized to lend you money. Otherwise, if they are not, you might get unprotected. Bear in mind, if you encounter an illegal lender, it’s important you let the authorities know, so they can take proper measures about it.

Do loan companies ask for money upfront? 

When you take a loan, the company must always show you the cost of such operation beforehand. What’s more, that information must be perfectly detailed, which means it must include all the fees and rates charged. Once you accept the loan offer, you’ll be notified about your 1st payment date. However, under no circumstances should a company make you pay for money before you sign your loan contract and get your money. If you’re charged any upfront fee, you should know that person or company is not working on legal terms so, avoid them completely.

List of Legit Loan companies in South Africa   

Although you might have to deal with some malicious lenders, fortunately, there are all kinds of loan companies in South Africa registered and working the way they are supposed to. What’s more, they offer all sorts of loans for South African citizens to accomplish whatever aim they have. Among those companies, you’ll find:

  • African Bank

  • FNB Bank

  • Wonga Loans

  • Nedbank

Or even some smaller ones like:

The best part of these legal lending companies is that there are all sorts of companies ready to assist you on the many types of loans:

  • Personal Loans

  • Home Loans

  • Vehicle Finance

  • Student Loans

  • Payday loans

So, from the biggest and most important loan, to buy a house for example, to the easy payday loan advance, you will get the economic support you need to cover your necessity with peace of mind of being protected by the NCA. All you need to do is to make sure your lender has proper authorization to lend you money.

Is any legit loan in South Africa to take online and receive in few hours with no documents required?  

No, there’s no way you are dealing with a registered provider if they are not asking you certain documents to verify your personal information. You can get fast online loans, but you need to prove your identity at least.

2 useful tips to get a Loan directly to a bank account     

One of the characteristics most borrowers look for is related to speed and comfort. As today we are used to having things in an easy way, banks work their loans online to offer their customers what they want. Although you need to follow certain steps and present documents, it will be possible for you to receive your fund in your bank account as soon as your loan is approved. In fact, most companies work this way.

Besides, there are 2 special strategies to get a loan faster:

  • One of them is an ATM loan: this type of loan can be of great use when you need to have a little money advanced to, for instance, make ends meet. Of course, it will be useful only if you need rather a small sum of money and, you can repay it in a short time.

  • Another strategy is to ask the loan to the bank you are paid your salary through. As they already have your income information and you clearly have an account with them, you will get an immediate answer about your loan petition.

What does it mean when your loan is provisionally approved?  

Among the steps to get your funds, you must go through the loan approval. Such step refers to the lending company checking your financial situation to decide if you have enough economic stability to afford the loan you’re asking. There’s sometimes a previous stage in which the bank lets you know your loan is provisionally approved. This means that although you’re one step closer; they need to go deep in your personal information before officially approving your credit request.

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How is an online personal loan finder beneficial in South Africa?   

I’m sure you already know getting the perfect loan term is not easy task. There are so many options available in this country that finding the right one turns to a puzzle. This is when loan finder websites, like ours, comes to rescue you.

  • First, you can read and get information about all your alternatives in an easy-to-understand way.

  • Second, you can find out which bank has the best loan offer with the lowest rate.

Can I find loan companies offering loans to people under R7500 income? 

By now, you’re probably wondering what happens if your income is not as high as most banks ask as requirement to be eligible. Well, as difficult as it may seem, there are always alternatives for low income earners to get their financial support. You may find trouble though, if you need to borrow a large sum of money as if your income is not good enough, the bank will reject the petition. The important thing is to check the company is, as we said, allowed to lend money so you don’t end up having a bad experience. I must point out, you must know for sure you can repay the loan on time before even applying for it. Do your best to avoid having some financial issues.

How do I make sure a loan is affordable?   

When it comes to asking money borrowed to a bank, we all know there’re some fees and interest to pay for the service. The thing is that what’s affordable for some people may not be for some other. So, to know if the loan deal you’re getting suits your budget, you need to consider:

  • your monthly income.

  • your monthly expenses (include public service, rent, daily expenses and so on)

  • your monthly installment.

Make sure your income is enough to cover for these points and you’ll be on the right truck.

Which is the cheapest kind of loan?   

As we have said, taking a loan brings about some costs. Of course, the cost to pay differs as regards the type of loan you take. Home loans, for instance, are among the most expensive due to the high quote and the difficulty the process involves. Payday loans, on the other hands, tend to have higher rates because of the fast process to apply and the shorter term to pay for them. Now, referring to cheaper loans, we should probably talk about personal loans. This kind of credit is popular due to their medium term and quotes offered. Once you know which type of loan you need, you can add your credit score to analyse as, the better your credit history, the lower the interest rate the bank will offer you.

How to Get SA Army Foundation Payday Loans?

The South African Army Foundation is the supplier of benefits and financial services for the Army and its employees. This company was set up in 1956 as non-profit organization authorized by the Department of Defense to offer services to members of the Army.

This organization has recently created a credit line intended to help their members with emergency expenses that were not foreseen or planned. For example, if you need to make an urgent repair at your house. We are talking about a payday loan, that is, you ask for a certain amount of money and you pay it back when you receive your salary.

With the SA Army Foudation you can request a payday loan for R500 to R2 500 and the application process is really simple and straightforward. You will need to fill in a short online form with your personal information and after the loan is approved, you could have the loan amount on your bank account within minutes.

What Kind of Credit Solutions or Loans does the SA Army Foundation Offer in South Africa?

Members of the Army who need to access to short-term loans can definitely count on the SA Army Foundation. With this organization, employees of the Army will be able to find convenient loans to accomplish their goals, whatever they might be.

The loans this organization offers are short-term in nature. What does this mean? This means that the loan can be repaid in a short period of time that ranges from 1 month to 12 months. If you work for the Army, you will be able to ask for an amount of R500 to R30 000.

Just like with any other kind of loan; you will need to fulfill certain requirements in order to request this loan. Serious credit providers need you to provide them with information about your financial situation to assess your affordability and establish you willingness to pay back the loan. For this reason, SA  Army Foundation will ask you the following documents:

  • Your ID or driving license
  • Debit order authorization
  • Three latest payslips or three last bank statements + last payslip

To sum up, there are as different types of loans as kind of necessities to cover. Now that you have read this article, you’re one step closer to get the best loan for you. If you need more advice on a specific loan you want to take, you can leave us your question and we’ll be glad to help you.

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Questions and answers

Does Standard Bank provide clients with home loans?

Yes, it does.

Can I get a construction loan from any of those entities?

Yes, you can.

Does FNB provide land loans?

Yes, it surely does

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