Personal Loans in South Africa – Bank vs Online

September 05, 2019

There are times when people find themselves in a financial pinch, whether it’s because they have bills to pay, a goal to get after, or unexpected expenses that need to be dealt with. Most people instinctively go for a personal loan simply because it’s the obvious option—but is it the best?

Now, don’t get us wrong—taking a personal loan from a South African bank can be a great option in many cases. The truth, however, is that there are quite a number of other options available to you that could possibly give it a run for its money. While it may be a good idea to check what kind of loan terms and rates you bank could possibly offer you, be sure that you look into your other options as well. With reputable online banks and lenders on the market, you can definitely get a better personal loan option to manage your financial situation if you look with a keen pair of eyes.


Choosing between a bank loan and an online loan

Should you find yourself in need of quick cash to remedy your financial situation, make sure that you go over the pros and cons of both banks and online lenders before applying for a loan. The points below will help you make an informed decision:



The bank is the first financial institution that comes to mind when people seek out personal loans for a reason: they have great customer service, a variety of options, and plenty of advertising. While a bank may seem like the right place to turn in harder financial times, here are a few pros and cons that you need to consider: 



  • Greater regulation: First and foremost, bank loans are highly secure due to the fact that they’re heavily regulated. This means that you’re less likely to get ripped off mid-payment.
  • Knowledgeable staff: When you apply for a bank loan, you’ll be able to speak to a banker who can assess your needs, assist you throughout the process, and even help you figure out what exact type of loan you should choose.
  • Communication in person: It can be much easier to discuss the terms of the loan, negotiate, and apply for the plan that best suits your needs in person.
  • Bank account benefits: Getting a loan at a bank that you have an account in can be much easier than any other option out there.



  • Stricter standards: If you have a poor credit score, chances are that you’re going to have a much harder time getting a loan from the bank because of higher credit requirements.
  • Higher costs: You’ll have to pay higher rates and fees on top of interest because of the bank’s overhead expenses.
  • Limited speaking time: Applying for a bank loan in South Africa can only be done during office hours, which means you’ll only be able to speak to your loan officer from 9 A.M to 5 P.M. 



Online lenders are the modern age’s answer to traditional bank loans. Unlike the latter, however, they come with much fewer restrictions. Often seen as a better alternative to traditional loan-sourcing methods, online lenders are highly sought after for a multitude of reasons, especially by people who are technologically dependent and familiar with the inner workings of online transactions. Online lenders are generally advantageous for a multitude of reasons, but they come with their own pitfalls as well. Let’s look at the pros and cons of taking a loan from an online lender to get a better grasp of an alternative you should consider:



    • Available 24/7: Online lenders work round-the-clock shifts, which means that South Africans can apply for loans at any time of the day, even on holidays!
    • Lower interest rates: Typically, online lenders have lower overhead expenses, which means that you can avail of lower interest rates (as compared to bank loans).
    • They can cater to any credit score: Generally, online lenders are much more lenient in terms of credit scores. This means that applicants with significantly lower numbers can still get a loan that’s catered to them.
    • Quick service and granting: Aside from being convenient and cost-effective, online lenders are known for their quick processing times. In fact, personal loans sourced from an online lender can be approved and given in as little as a day!






  • Limited customer service: In spite of their convenient nature, going for an online lender can prove to be a bit problematic if you find yourself in need of a loan officer’s guidance. Typically, the only way to contact an online lender is via online chat or email, which means that you won’t be able to reach them by phone or talk to them in person.
  • Less financial knowledge: Compared to standard bank loan officers that are trained, online lenders tend to have lower levels of knowledge about financial concerns. This means that you’ll have to pay special attention to the terms you’re subscribing to.




When unexpected circumstances arise, it isn’t uncommon to have to borrow money to deal with it. Instead of bracing yourself for the lengthy loan application process at a bank, however, why not consider Hoopla Loans? We offer personal loans to South Africans in a matter of hours, making us your best opportunity to get your hands on the cash you so desperately need. Let us help you today!