Our Guide on Direct Loans – What Every South African Borrower Needs to Know

Dec 19, 2019

Direct loans—also known as a “loan direct”—have been sustained as the talk of the town amongst South Africans who are in need of financial assistance. Regardless of whether you’ve heard of it through a friend of a friend or read about it in an online ad, direct loans are a hot topic. 

To understand what all the buzz is about exactly, let’s go over what you need to know about direct loans (and whether you should apply for one yourself): 

What is a direct loan?

A direct loan is a form of financial assistance made directly from a lender to the borrower, essentially cutting out the usual third parties that are often involved in other types of loans. Generally, direct loans may be found through several lending institutions, such as nonbank institutions, established banks, online lenders, and small-time businesses—all of which have their respective rates and regulations. Various types of direct loans can also be found with merchants or businesses, often being offered as a specialized type of financial assistance (such as a “direct home loan” or “direct car loan”).

What are the different types of direct loans?

For the most part, every different type of direct loan is simply a standard example with the same framework as other options, except that it has a unique name and purpose. Student direct loans, for example, are the same as a direct payday loan, except that the former is solely intended for tuition. Some examples of direct loans include:

  • Student direct loans
  • Direct home loans
  • Personal direct loans
  • Direct car loans
  • Direct payday loans

What can you get out of a direct loan? 

Direct loans are so popular and positively received because they have various advantages. Here are a few benefits that you can get when taking out any type of direct loan:

1. They are much cheaper in comparison with other financial assistance options

The average direct loan has little-to-no service costs, significantly lower rates and other accompanying costs for one simple reason: there is no middleman involved. Comparing a direct loan with a secured personal loan, for example, will show that the former has about two to three per cent less interest per month as opposed to the latter.

2. They come with several advantages that can’t be found in any other option

Another reason for direct loans being one of the hottest financial assistance options today lies in the fact that they come with several perks that are unique to them alone. Several unique add-ons, such as fixed-interest rates are typically advertised with the direct loan itself, essentially making it a sort of “buy-one-get-one” type of deal. 

3. They have a greater amount of security

As opposed to less-secure types of “quick-pay, low-interest” loans that are provided from less-than-reliable sources, direct loans are heavily regulated by the South African government. Having a greater level of regulation means that lenders cannot do anything uncalled for during a contract, such as jacking the prices up, suddenly asking for collateral, and the like. 

Direct loans bridge the gap between a lender and borrower, effectively easing up the process and cost of getting a loan that works best for both parties in the long run. 

If you’re looking for the best direct loan provider in South Africa, visit Hoopla Loans now to get your instant loans