Loans in South Africa 101: Payment Issues – What to Know

June 20, 2019

As much as we want to stay on top of our finances, we can’t always avoid emergency situations. There will also be times when money is scarce. In the face of such circumstances, chances are we’ll prioritise our basic needs and other major things, such as utility bills. We’ll probably put off paying back loans. In case we can’t settle, we’ll probably end up making other arrangements to do so. The truth, however, is that there are many ways to solve this problem. If you’re clueless and worried about how you can dig yourself out of the pit, read on for some useful tips.

Challenges of Late Payments

When you take out a loan, the goal is to settle it on time. Delayed payments aren’t profitable in any way. Why? Well, when you can’t make your monthly loan payments, chances are you will incur negative consequences such as the following financial challenges:

  • Penalties such as late charges
  • Increased interest rates
  • Additional fees
  • Negative credit report

This is why most borrowers strive to pay on time. Delayed payments will only result in added fees on top of your regular monthly payments. We can’t blame you, though. You’ll only fail to pay on time if an unexpected situation gets in your way. That is unless you’re simply not managing your finances well. That’s another story.

Loan Payment Options

Now, if you can’t pay your debts for some reason, there are still some things you can do. Let’s explore your options.


  • Refinancing Payday Loan: Payday loans can be consolidated with personal ones, but doing so might lead to higher interest rates. That being said, you might want to consider this in case you won’t be able to settle your loan anytime soon.


  • Contacting the Lenders: Contacting the lenders may delay the payment for a couple of months. Most lenders offer different payment arrangements. You may want to talk to your lender to see what arrangement best suits you and your circumstances.


  • Making Secured, Long-term Loans: You may want to apply for local, unsecured loans that will minimise the possible damage to your credit score. Of course, your credit report is paramount. You don’t want to have this tainted because you can’t settle your loan.


  • Prioritising the Outstanding Payments: If all else fails, you have no other option but to prioritise and pay your outstanding balance.


Special Loan Opportunities

There are also many special loan types that you might want to consider in order to get you out of this situation. You may not know it, but there are loan types specifically created to help those in need. You may want to consider any of the following:


  • Federal Student Debts: Students can benefit from deferments or other income-based repayment plans. It’s good that they are entitled to federal government-backed credit.


  • Payday Loans: You can cut your expenses and save time by consolidating your unsecured loans and shifting them to an affordable credit organisation. However, you have to settle all legal issues before you can stop paying the loan.


  • Credit Cards: If you’re looking to settle a credit card loan, try to make small, minimal payments by finding additional sources of money. This is better than simply stopping monthly payments because the latter will see interest rates increase exponentially.


  • Financial Help: If all else fails, you can seek financial aid or assistance. You may do so via the following: bankruptcy registration, credit counselling, and public assistance. It’s also a good idea to consult an attorney.

If you’re looking for a payday loan in South Africa, get in touch with us today! We’re happy to help you with your situation.