3 Common Short-Term Loan Mistakes That Many South Africans Make – What to Know

January 23, 2020

At some point in your lives, a short term loan is an ideal solution for your financial needs. It could be that there’s a medical emergency or other urgent situations that require quite a huge amount of cash. 

There’s nothing wrong with taking out short term loans, but keep in mind that it becomes a problem when it is mishandled. Here are three common mistakes that many South Africans make when taking out a short term loan. Keep on reading to find out what you should avoid:

1. Not being prepared

Deciding to take out a short term loan is one matter, and preparing for it is another. The latter is the most crucial because a lender will need the necessary requirements to process your short term loan. If you don’t have them ready, then you run the risk of prolonging your agony. 

Make sure that you have all the necessary requirements. One way to do this is to check out the lender’s website as they always have their short term loan requirements posted on their page. Aside from the requirements, you need to plan how you’re going to repay your loan. This involves creating a budget plan and devising strategies to pay off your loan as early as you can. 

When you have a plan, you’ll be able to provide the right answers to your lender so that your loan will be easily approved. 

2. Not paying the loan on time

When your short term loan is approved, it comes with a set timeline and the dates when you are expected to pay parts of the loan. Know that missing your deadlines will reflect poorly on you, and it may also incur additional fees from penalties. As a result, you’ll end up paying more, which could potentially put you a deeper financial hole. 

To prevent this from happening, planning your budget and ensuring that you can religiously pay off a short term loan are crucial. Also, make sure that you stick to your payment deadlines. 

3. Ignoring the terms of your contract

Upon loan approval, you’ll be asked to sign a contract. However, there are many borrowers who fail to read the fine print and just skim through it instead. Remember that you’re signing an official contract that involves money, so you need to make sure that every detail is clear for you. 

Ignoring the terms of the contract may pose potential problems in the long run. So, it’s best that you read everything thoroughly and clarify any doubts with your lender to ensure that both of you are on the same page. 

A short term loan is one of the easiest ways to get cash for emergencies. However, it’s still a loan, which is why you need to be careful when taking out one. There are plenty of reliable lenders that you can find, but before you apply for a short term loan, you have to do research and determine if the terms of a particular lender will work for you. 

After that, make an effort to avoid making the most common mistakes above. By doing so, you can guarantee a smooth process, and you will stay from further financial difficulties. 

If you’re looking for a short term loan in South Africa, get in touch with Hoopla Loans today! We’re happy to help.