5 Things You Must Know About Payday Loans in South AfricaDec 30, 2020
Payday loans are often the go-to money resource in South Africa for financial emergencies. In fact, they make up approximately 67 percent of all credit held by South Africans between ages 25-39. In a nutshell, they are small, short-term unsecured loans that are readily available in the market and are very fast and easy to obtain, which makes them favorable to most South Africans.
If you are planning to take out payday loans, here are five key things you need to know about them:
1. They do not require collateral
Most lenders impose collateral in various types of loans. Whether personal loans, auto loans, or mortgages, they stipulate in the contract that borrowers’ assets will be taken away and owned if they fail to pay off their debts. What’s good about payday loans is that they don’t ask for your cars, jewelry pieces, and other assets as forms of collateral. All they require is for you to submit documentation proving your ability to repay your loan. This is why these loan types are considered unsecured on the lender’s part.
2. They have a high-interest rate
Most banks and financial institutions do offer a low-interest rate for their loan programs. On the other hand, however, payday loans typically charge a high-interest rate. Yet, this is still governed by the National Credit Act, where lenders can only charge up to five percent for a month-long loan or 30 percent for a six-month loan. As these are considered unsecured, this is how the lenders will earn on their end.
3. They are quick to process and obtain
As mentioned above, payday loans are relatively easy to process and obtain. All it takes is for you to apply online and send proof of employment and income; there’s no need for credit background checking. After a brief evaluation, you’ll get a notification on your approval or denial. If fortunate enough, you’ll be surprised at how you’ll instantly get the money in your bank account in just a few hours or so!
4. They are a very convenient type of loan
Payday loans are very convenient for those who need money in case of emergencies. The chances are that you have run short of cash or need money for unexpected medical expenses. As they are easy to be processed and obtained, you’ll get what you need to pay off any expenses. As mentioned, you don’t necessarily have to drop by the lender’s location as everything can be processed digitally!
5. They are best secured from a trusted lender
When it comes to securing a payday loan, it’s still best to be wary of the lender you’ll be dealing with. Keep in mind that scams and fraudulent activities are very rampant nowadays, and the last thing you will ever want to happen is to fall prey to a crooked lender. For this reason, be sure to do your research and perform due diligence before submitting your loan application.
At this point, you now know what payday loans entail. They do not require collateral, have a high-interest rate, are quick to process and obtain, are a very convenient type of loan, and are best secured from a trusted lender. However, keep in mind that you have to be wary of where you get your loan from. Ultimately, a payday loan will be able to keep you afloat during a financial situation and not drag you into a bottomless financial pit!
Are you looking to get a payday loan? We’ve got you covered, as we offer the best online payday loans in South Africa. As a reputable lender, we provide online payday loans, personal loans, quick loans, as well as medium and long-term loans with flexible terms and competitive rates. Get in touch with us today to see how we can help!