What You Need to Know About Finding Low Interest Loans in South Africa
August 29, 2019Life is not always rainbows and butterflies. Sometimes you’ll need help with your finances. This happens when unexpected expenses come along. When faced with such circumstances, a low-interest loan will solve your problems. You can use it to pay your utility bills or fund a major purchase. It can help you meet your financial needs and smooth your cash flow.
In the next section, we’ll learn more about what a low-interest loan is and how to choose one. Here’s what you need to know about finding low-interest loans:
Low-Interest Loans
When obtaining a loan from lenders, they’ll provide a range of interest rates. Typically, interest rates vary between 4.99 percent and 36.99 percent Annual Percentage Rate (APR). The lender’s decision to charge a borrower depends on the latter’s qualifications. If you have a better credit score, chances are you’ll get the lowest rate advertised. If you have a lower credit score, lenders will charge you a higher interest rate to offset the risk they take in giving you a loan.
Qualification for Low-Interest Loans
Generally, lenders have their own criteria for deciding who gets a loan, not to mention what interest rate they receive. Below are some of the factors they take into account:
Credit score: The most important factor is the credit score. The higher it is, the lower the interest rate will be. Many lenders start with your credit score. A good credit score means you’ll be able to pay your bills on time.
Credit history: Aside from your credit score, many lenders will also review your credit history. They’ll assess what kinds of accounts you have, how long you’ve had them, and how you’ve managed them.
Debt-to-income ratio: Lenders need to know how much you’re earning and how much you’re spending. That’s why they’re more likely to look at your monthly income and compare it to your monthly obligations.
Employment: Lenders will check if you’re employed first. This is to ensure that you have a stable job and enough income to make the loan payments.
Availability of Low-Interest Loans
Generally, there’s a vast array of lenders that are out in the market willing to provide low-interest loans. It’s just a matter of finding the right one. How can you go about that?
First, you can start by searching online. You can visit websites that offer reviews and access to different lenders. Here, you can check potential rates and even get a quote. Second, you can go to your local financial institutions. Visit your bank and ask about personal loans. Finally, you can ask a credit union, as it can give you a reasonable interest rate on a loan.
Final Words
Once you’ve made your decision, you can go ahead and apply for a loan. If your application is approved, expect the money to be released into your account. The ball is now in your court. You’ll be responsible for making sure you make each payment on time until the loan is paid in full.
Low-interest loans are extremely beneficial. You just need to know where to find one if you’re ever in an emergency situation. If you’re looking to apply for a personal loan in South Africa, get in touch with us today to see how we can help.