Personal Loans

There are various forms of credit available in the form of personal loans to customers and are provided only by institutions who operate as a Registered Credit Provider in terms of the National Credit Act.

What is a Personal loan?

A personal loan is one of the most basic types of loans. It can be used to fund anything - home improvements, furniture, a vacation, or an unforeseen expense. Some people use a personal loan to consolidate their debt.

A personal loan is a reliable option for anyone who needs access to immediate cash for personal use. There are two basic types of personal loans, secured and unsecured loans.

Secured Loan

A secured loan requires you to offer one or more of your assets as a form of collateral. If you are unable to repay the loan, the lending institution will be able to take your assets for immediate repayment.

You will generally be offered a competitive interest rate if you take out a secured loan, because the risk to a lender is not as high as in the case of an unsecured loan.

Unsecured Loan

An unsecured loan does not require that you provide any form of guarantee. Consequently, you will pay more interest on an unsecured loan because the risk to the lender is greater.

There are many banks and lending institutions that offer unsecured personal loans. These are specifically tailored for people who do not have any property or assets to offer as collateral.

Personal Loan Basics

You can take out a personal loan for as much as you can afford depending on the rules of the lender. Monthly repayments are usually calculated according to your loan terms and your credit score.

Lenders are required to do a credit check to determine how much you can afford.

Personal Loan Lending Criteria

Lenders will ask you to provide them with your most recent payslips, your South African identity document and your latest bank statement.

You may be required to take out credi life insurance on your loan in the case of retrenchment, disability or death.