Personal Loans – Get Greater Financial Help to Meet Your Expenses

Personal Loans

Personal loans are meant for fulfilling greater financial needs. These are ideal loans when the loan amount involved is not very high but it is enough to buy some expensive things. South Africans can borrow the loan from the established lenders who offer loans at competitive rates. Personal loans are also known as installment loans. You can borrow any amount that is within your repayment ability for any personal work. You can use these loans for a variety of things including payment of school fees, home renovations, and other personal things that you want to do. These loans can give you quick access to money.

An unsecured loan

You do not have to put anything as collateral with the lenders as these are unsecured loans. This means that there is no risk for you in borrowing the money. Therefore, these are ideal loans for people with no valuable asset to put with the lenders. So, even when you do not want an expensive property to be put at risk, then personal loans are the best option. This also means that your loan approval comes quickly as there is no property evaluation process involved.

However, because of unsecured personal loans, your loan amount will be comparatively much smaller as compared to the secured loans against a property. So, opt for personal loans for smaller financial help.

High-interest rates

Because there is no collateral to put, the lender covers their risks by charging higher interest rates. However, for most borrowers the interest payment is manageable. The interest rates may go further higher for borrowers whose credit history is blemished and credit score is lower.

But you should compare the interest rates of different lenders. Many lenders in South Africa are competitive in lowering their interest rates. Even a smaller percentage of lowering of the rates can save you money on interest payments. So, compare as many online lenders as you can.

Loan amount

A personal loan in South Africa can fetch you any amount ranging from R2000 to R 150000. With this amount, you can meet your greater financial expenses towards some personal works. However, if your repayment ability is higher and you earn a larger paycheque, the lender can also think of providing you a greater amount of loan.

Repayment duration

The repayment duration is generally short depending on the loan amount. If the loan is bigger, you can spread its repayment in many more months. So, for example, if you need R4000 for 6 months, then you can repay in 6 installments of R900 that you can repay each month. This means the borrower has a greater flexibility in repaying the loan in a longer period of time.

 But if you borrow R 4000 for a month, you will be repaying R 4735 in a month, which will be burdensome for many people. This means that personal loans give you control over your monthly outgo. Late payment will also have an adverse impact your credit rating. This will result in more hurdles in taking out a new loan.

When to take a personal loan?

You should opt for this kind of consumer credit only when you really need it. You must be confident about repaying the loan on the due date. Take out personal loans only for long-term financial issues. However, personal loans for bad credit should be avoided as a long-term solution for financial issues. It should also be noticed that personal loans are not the solutions for managing your existing debts.

How to borrow?

Personal loans are easier to take in this digital age. Many lenders in South Africa are providing personal loans online. You need to visit the loan website and fill the online loan form.  You will be supplying some personal information such as your name, home address, email, loan amount, employment, monthly earnings etc. Since you are giving personal details, make sure that the website is well encrypted for topmost security from any theft of your data.

You will also be required to upload the documents that prove your employment status or earning potential. The lender will send you an email of approval. Then, the approved loan will be in your account soon.

Credit checks

Since is offering a greater amount of loan, you may be subjected to credit checks to know the risks you carry. If you made many errors in payment of past debts or you are a defaulter, your bad credit history will lower your credit history. In that case, the lender will cover the risks by increasing the interest rates. So, be prepared to borrow the loan at higher interest rates. As you repay the loan on time, it will be recorded in your credit history for improvement in your credit record.

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