When Is Taking Out a Personal Loan Going to Be Helpful?

January 28, 2021
Personal Loan

The best-case scenario for all of us is that we would never be in a position wherein we’d need to look into fast online loans in South Africa. Unfortunately, life often has a way of placing us in situations that require certain solutions because of an expense that is as immediate as it is unforeseen. Some of these situations include appliances breaking down, which require repair or replacement, car malfunctions or breakdowns, and even illnesses hitting our beloved family pets. 

However, it is crucial to be extra self-aware just because loans are a possibility. There’s a rather convenient way of convincing yourself that instead of saving up or postponing the purchase, you absolutely need to take out a personal loan for a specific purchase. The truth is, it is best to avoid any sort of borrowing of funds unless it is absolutely necessary. When or how will you know, then, that it is necessary to take out a personal loan?

Read on to find out when taking out a personal loan is going to be helpful:


  • When the purchase is essential


Funds used to be able to carry out your usual day-to-day living normally are counted as essential expenses. Loans that fall under this category are usually funds for medical treatments your insurance won’t cover, or repairs to your vehicle after an accident occurs. Things that are not essential, on the other hand, include the latest mobile phone or the Playstation 5.

Keep in mind that taking out a loan for expenses that are non-essential will negatively impact your ability to qualify for a personal loan down the line, when it’s really needed. There’s a limited amount you can borrow at any given time; whenever you take out quick loans in SA, the chances of qualifying for the next one lower considerably. 

Ask yourself if the loan you’re taking out is really necessary in the first place. There is a marked difference, for example, between purchasing a brand-new laptop because it’s the latest model and buying a brand new laptop because your old one is malfunctioning and you need it for work.


  • When your credit score is good


Does your credit score fall below 500 on the Delphi scale, essentially considered below average? At that point, applying for another loan is not your best course of action at all. However, it’s key to not just go for the “okay” category in terms of your credit score. Having a good credit score (720 and above) means that you can qualify for a lower interest rate. Over the life of that loan, you will pay far less compared to what you would pay for with a lower credit score.


There are a handful of indicators you can use to determine whether or not it’s necessary for you to take out a personal loan. Try to keep in mind that with every loan that’s approved, the chances of another one being approved lower considerably. Use your better judgment and only take out a personal loan when it’s really necessary.

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