Quick Online Personal Cash Loans – but there’s a price to pay!
October 16, 2017
What does it cost to take out online personal cash loans?
- Check interest rates repayable – they can be exorbitant
- Quick cash loans are for individuals, not businesses
- You must earn at least R2 000 monthly to qualify
- Online personal cash loans are for amounts not exceeding R50 000
- Applicants do not have to provide any security
- Online personal cash loans are pegged at short-term repayment periods
- Payday loans ease monthly cash flow problems
It is relatively easy to obtain quick cash loans online in South Africa today.
However, there is a price to pay for online personal cash loans.
And that is the cost of interest rates which can soar to 112% annually.
So think very carefully before choosing this option.
There could be other solutions before selecting an online cash loan that could cost the applicant an arm and a leg!
What is a personal loan?
Lenders grant personal loans to individuals, as opposed to business owners.
Maximum loan amounts are pegged, generally in the region of R50 000, with repayment periods of up to seven years. Minimum loans start at R1 000.
These loans are unsecured, so applicants do not have to provide any security to obtain loan approval.
Personal loans are available to South African citizens who are at least 18 years of age and who earn a minimum of R2 000 monthly. They must also not be under any form of debt review.
How to find out more about online cash loans
The simplest way to approach this option is to do an online web search.
Type “online cash loans” into the browser and to see an array of different companies and their products.
These web pages give the viewer all relevant details, enabling them to make an educated and informed decision.
Let’s look at a few examples
Company No. 1
Applicants do not have to disclose the reason for the loan.
They may be needing funds to renovate their home, purchase a vehicle, repay another debt or anything else of their choosing.
The borrower can repay the loan over a three-to-six-year period, with interest rates pegged at 27.75% for a seven to 72 month repayment period.
Example of repayment costs
- Loan amount: R50 000
- Repayment period: five years
- Monthly instalment: R1 655
- Total repayment: R99 285
Company No. 2
There are two types of personal loans available.
Loan-seekers can apply for a “maximum affordable loan” based on the largest amount available relative to monthly earnings.
The other offering is called a “specific affordable loan” which enables customers to apply for a specific amount of cash.
Rates of interest range from 36% to 60%, depending on the amount loaned and the repayment period.
Example of repayment costs
- Loan amount: R2 500
- Repayment period: three months
- Monthly instalment: R1 148.49
- Total repayment: R3 445.46
Company No. 3
This is a cash loan service provider.
In other words, they undertake to find the client the best cash loan deal by negotiating directly with various finance houses.
They will charge up to 112% annually, depending on the loan amount and repayment period.
Borrowers can have the loan for a minimum of 65 days and a maximum period of four months.
Example of repayment costs
- Loan amount: R5 000
- Repayment period: 65 days
- Monthly instalment: R2 860
- Total repayment: R5 720
Company No. 4
This company offers borrowers short-term loans from R100 a day to R8 000 a month.
This degree of flexibility allows the borrower to remain in control of personal finances, discouraging clients from applying for more money than is actually required.
They charge an annual interest rate of between 36% and 60% and short-term loans are repayable between 61 to 180 days.
Example of Fee and Interest Breakdown
- Service fee: R50 a month plus 14% VAT
- Initiation fee: 15% on the first R1 000 PLUS 10% of any value exceeding R1 000 to a maximum of R1 000 PLUS 14% VAT
What is a Payday Loan?
Another very popular form of borrowing cash is called a Payday Loan.
This form of finance is offered by a number of companies and helps breadwinners to meet cash shortfalls until their next payday.
Cash is advanced against salary cheques and must be repaid within 45 days.
How to apply for quick online personal cash loans
Visit the company of choice online and read all relevant information.
Complete the online application form. This is secured with encryption codes, ensuring privacy from prying eyes.
Information required is ID numbers, monthly income and expenditure, employment and bank details.
Applicants are informed within a very short space of time as to whether or not the loan has been approved.
Once approval is received, applicants will need to verify their income by providing the finance house for three recent payslips or bank statements. This must show personal details, such as name and address.
The money is transferred into the applicant’s bank account.
Repayments are made via bank accounts, so applicants must ensure that they have sufficient funds to meet these monthly payments on due date.
Failure to stick to the deal
Borrowing quick cash online may be relatively easy, but failing to stick to the terms and conditions of the deal could have serious consequences.
Failing to have sufficient funds in a bank account to meet the monthly repayment commitments will lead to additional costs such as from the bank for having insufficient funds or from the lender who could impose crippling additional interest rates.
If a borrower continues to ignore repayment demands, he/she will be blacklisted on credit bureaus and fax legal procedures.
It is always advisable to contact the lending company in the event of changed personal circumstances.
Most lenders will try their utmost to assist, by extending the loan repayment period or changing the repayment date, rather than reverting to extreme measures.
So, if in doubt about the ability to repay the loan, do not apply for one in the first place.
Before applying for a quick cash loan, draw up a personal budget to ascertain whether or not the monthly repayments are affordable.
Understanding the terms and conditions of the contract is imperative.
Always ensure that the lender is registered in terms of the National Credit Act.
Building a solid credit rating should be the number one priority.
By consistently meeting repayment obligations, the borrower will improve his/her credit rating and increase chances of obtaining further credit, such as an all-important home loan.
Next step: Complete and submit the form on this page to apply for a quick cash loan
All info was correct at time of publishing