Getting personal loans in South Africa is not an easy task, especially if you do not have a lot of money stacked away or collateral. However, when the going gets tough, getting a personal loan becomes necessary. Obtaining a personal loan in South Africa is not as straightforward as most of us would like. Sometimes, a personal loan is the only option that is available when you do not have any other resources.
Most people only apply for a personal loan in the most difficult of circumstances. Thus, the personal loan helps them overcome the problems they might be currently facing. However, the problem occurs when individuals are unable to pay back the loan on time. Hence, their credit score takes a hit and it only pulls them into a more difficult situation where they experience trouble getting a loan in the future. However, personal loans are crucial as they allow you to finance your daily activities such as make payment for medical bills and even purchase a brand new car. Thus, when you obtain a personal loan, you get money to complete the transaction. If you live in South Africa and are interesting in getting a personal loan, the following tips will come in handy.
- Compare Different Offers
One of the most important tips that you should keep in mind when shopping around for a personal loan is to compare different offers. Never make the mistake of accepting the first offer you come across. Remember, many personal loans are available. Each loan has different requirements. For instance, if you require an unsecured loan, you would need to have someone sign the contract for you to make sure that you pay back the loan and if you do not, they must guarantee to pay back the amount. A secured loan on the other hand does not require any signing. However, it comes with a risk if you fail to pay the loan back. You would end up losing the property that you place as collateral.
South Africa is the most modern African nation. Hence, you can easily get a personal loan from different places. If you seek a loan from the bank, you would face stringent requirements such as a high credit score.
- Ensure That You Can Afford the Loan
Even though lenders will try their level best to make sure you can pay back the loan, you still need to be sure that you can pay back the loan. Do not proceed with a personal loan that you cannot pay off. The first thing you need to do is determine how much money you need before you look for a loan. Since most lenders charge a fee that gets deducted from the loan amount, you should also incorporate the fee and see an amount that covers the amount you require. Then, you should find out how much you can afford every month in the form of payments. Many personal loan calculators will help you calculate how much you can pay back to the lenders each month.
- Know What Your Credit Score Is
When you look for a personal loan in South Africa, most lenders will conduct a credit score check before they make a final decision. Although most personal loans require a favourable credit score, you must know what your credit score is beforehand. Remember, the better the credit rating, the easier it would be for you to qualify for a personal loan that has a lower interest rate. However, even if you have a low credit score, you should be able to apply for certain loans. Keep in mind that these loans would come at very high-interest rates and fees which would only push up the credit score.
- Agree to Higher Interest Rates
Sometimes, you need instant money and the only way to get is by seeking a personal loan. However, if you are having a very difficult time finding a lender that offers a low-interest rate, you would need to agree to a higher interest rate. But, it should always be your last option. Only if you cannot find a single lender who is willing to provide you with a personal loan should you agree to higher interest rates. You should stay away from higher interest rates if possible since they only add up.
- Opt for Online Lending Services
South Africa is the financial leader of Africa. It is the backbone of the African finance industry. South Africa has provided many poor African nations with the funds to succeed in the world of today. The South African financial industry has developed significantly in recent years. It has led to many online lending services emerging. If you are looking for a personal loan, you should consider opting for an online lending service. The reason why online lending services make for a great option is that they provide personal loans to people that have a low credit score. Although online lenders do look at your financial resources, they tend to have a more lenient approach to lending money. Hence, you will have an easy time obtaining a loan.
- Make Your Final Decision Carefully
Getting a personal loan in South Africa requires you to think outside the box, especially if you have a bad credit score. However, you should be able to make your final decision at the same time. Let the lender know how much money you need to borrow, carefully go over the terms and conditions, and offer all the relevant information that is required for the loan like your full name, date of birth, employment details, address, and others. Make sure to review everything before you sign the agreement. You should read the fine prints and then only agree to take up the loan. The last thing you need is overlooking a hidden fee that has been clearly stated in the contract.
Now that you have gone over the top 6 tips for getting personal loans in South Africa, you will have no trouble getting a personal loan.