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Understanding Personal Loans in South Africa
Have you ever wanted to buy something but you do not have the money to buy the thing? And its something you really want and possibly won’t be able to do without it. This is when you need to start shopping for a loan.
What is a personal loan in South Africa?
A personal loan is an amount you borrow for personal use from a lender who is registered under the National Credit Act 34 of 2005. The big 5 banks all have one personal loan in one form or another. Emerging banks such as Discovery, Investec and Tyme Bank also have a form of a personal loan. Alternative lenders like Lime24 and Fasta Loans particularly focus on providing personal loans as their primary business.
The general definition of a personalized loan would be: ‘the amount you borrow for personal use’.
Personal vs Business Loan
There is largely no difference between the two, excerpt that most Business Loan lenders are not regulated by the National Credit Act and as already stated above, Personal Loan lenders are regulated.
Primarily, you can take out a personalised loan to build or manage your business but you can not take out a business loan for personal use.
Are vehicle loans and home loans recognised as Personal Loans?
Yes, a vehicle loan or home loan is a personal loan. However, due to the huge demand and the sizes of amounts needed for these types of loans, lenders tend to treat them as different from general personal loans.
What is a General Personal Loan?
A general personal loan, is a loan you apply for without having to specify to the lender what you want to use the money for.
What are the interests on loans?
It depends on the lender and your credit score but the general interest rate on a personal is 27.5%
What is a good credit score to qualify for a Loan in South Africa?
A credit score of 630 and above will usually be sufficient to get you a loan. However, there are many other factors that are taken into consideration. Amongst them, your credit profile. Your current debt and your income.
Which bank gives the best loan in South Africa?
The First National Bank has the best loans. However, it depends on how much you need and when do you plan on repaying it. You can check above on our comparisons on how each bank will help you and what type of loan their good at.
What is the best place to get a personal loan?
The best place to get a personal loan in South Africa are the big 5 banks, alternative lenders or fintech lenders. FNB, ABSA, Standard Bank, Nedbank and Capitec Bank offer some of the best personal loan interest rates to their existing clients.
How much can I qualify for a personal loan?
You can qualify for a personal loan as low as ZAR 300 to ZAR 350 000, depending with the lender. Payday lenders such as Lime24 and Fasta loans can offer personal loans ranging between ZAR 300 to ZAR 8 000. Whereas you can qualify for up to ZAR 350 000 with banks.
Which bank gives Personal Loan easily?
You can easily can a personal loan from First National Bank, ABSA, Nedbank, Capitec Bank, and Standard Bank. However, you must have your credit score above 630, be employed or have a stable source of income and be an existing client of one of the banks.
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