Short-term loans up to R250 000

Short-Term Loans South Africa

Short-term loans in South Africa are also called micro loans or emergency loans. You can use this kind of cash loan for anything you need and is typically an unsecured loan. In other words, you do not have to put up assets you own as collateral.

Although a payday loan is almost the same as a short-term loan, there are some differences between the two. We discuss payday loans specifically further on.

Depending on the lender, short-term loans can range from R500 (five hundred Rand) up to R15,000 (fifteen thousand Rand), while the terms will vary from 6 to 18 months.

Because a short-term loan is designed for a short time period, this type of financing usually comes with higher interest rates. But again, this can differ from lender to lender.

Short-term loans bridge the gap between big and little loans. When you need a moderate amount of money for a few months, but you need it quickly, short-term loans offer a medium amount of cash, quick processing and a shorter loan term.

In any event, every loan applicant should use the opportunity to compare interest rates and other charges with our short loan a comparison tool or, in other words, our short-term loan calculator. Thanks to the shorter timeframe of the loan, you may find that the total repayment amount is less than you expected.

Read more  What income do I need to afford a $400K house?

When you are comparing your options for short-term finance, be sure to check the annual percentage rate (APR), the loan amount, the loan terms and any associated fees. Using Arcadia Finance’s comparison tool will help you make a better decision.

  • You are over 18 years old
  • You are employed and employment has lasted for more than 6 months
  • Your loan should not be more than 8 times larger than your monthly income

Short-Term Loans Lenders

Registered credit providers include banks, credit brokers and online lenders. These companies grant short-term loans in accordance with the rules laid out in the National Credit Act (NCA) of 2005.

Borrowers must beware. Only registered credit providers are bound to interest rates and charge limits set by these regulations. As for unregistered credit providers, regulations don’t apply, and they are free to set their own charges.

When quoting interest rates, it is always per month. If you take a R2,000 loan and repay it over four months, a 5% interest rate would total R400.

Short-Term Loan Options

When you need to get hold of cash in a hurry, you have several options. Apart from the standard short-term loan discussed above, other solutions may be available to you, such as a bank overdraft, your credit card or a payday loan.

Interest Rates and Other Fees

It’s always important to compare the monthly payments. Not only will this figure include the loan amount, but the interest rate as well. Look at all the fees incurred when applying for any loan, as they will vary between lenders.

Read more  Rebuilt Title Auto Loans

Most lending companies will approve short-term loans the same day, although some may take 24 to 48 hours.

Short-term Loans and Your Credit Score

Often, a lender will perform a credit check although, the main requirement is that a loan applicant has a permanent job. You usually need only the basic paperwork.

Credit Score Check

Many South Africans struggle with monthly payments. As a result, your credit score may not be good. It’s still possible to find lenders who will lend money to people with a bad credit score, but the interest rates will be higher than usual.

Payday Loans

Payday loans in South Africa are normally smaller sums of money, loaned to borrowers for short lengths of time. They get their name because the loan repayment must happen by the next payday.

For that reason, most payday loans don’t exceed R3,000. Once lenders approve your application, cash is usually available immediately. As can be expected, interest rates will be higher, and the repayment terms are shorter.

The interest rates for payday loans in South Africa are typically 5%, although lenders may apply extra charges, such as lenders’ service fees.

Registered credit providers are not allowed charges exceeding the maximum interest. Before lending you the money, they must ensure you have the means to repay the loan and interest.

In case a borrower cannot pay the payday loan back, the lender can go to a civil court or send the debt to a debt collector.

On the other hand, unregistered credit providers have been known to take ID cards, extort money or repossess goods—without a court order—if the loan isn’t repaid. Always loan money from a registered credit provider.

Read more  How To Finance a Car

Applying for a payday loan online is quick and easy.

Remember to compare your payday loan options with Arcadia Finance. It’s the sure way to get a better overview of the loan terms, charges and conditions.

Payday Loans Online

There are benefits to be had with a short-term loan. You’ll pay less on interest, there aren’t any harsh requirements, such as a perfect credit score, and you get the cash quickly.

The whole process, from application to processing, is all taken care of online. When lenders approve your loan, they transfer the money into your bank account instantly.