Payday Loans

An A-Z Guide for Payday Loans in South Africa

Are you someone who plans your budget every month to keep a track of your expenses? Does this budget include unexpected expenses? Probably not! Most people create a budget based on their regular expenses.

But when an unexpected expense such as a sudden trip to the hospital comes up, people fall short of money. And the situation gets sticky if you haven’t got your salary yet. And in times like these, you need immediate cash that will help you cover your finances.

This is where a payday loan comes to your rescue. But do you know what payday loan is exactly and how the process works? If not, don’t worry! We have got you covered. In this blog post, we will give you the complete A-Z of payday loans that will better prepare you when the time comes.

Payday loan: What is it?

As the name suggests, a payday loan is a type of short-term loan where you get a small amount of money until your salary arrives. Once your salary gets deposited into your account, you need to pay back the loan.

Since this is a short term loan, you need to pay it back as quickly as possible. The loan also has higher interest rates, so it is beneficial to pay it back ASAP.

Payday loan: How do they work?

  • Compare: Start by comparing different payday loan offers available on our website Snappy Loan. You will find numerous offers from lenders around the country.
  • Calculate: Use our online calculator to determine the repayment amount. This will help you understand whether you can afford the loan or not.
  • Apply: By clicking on ‘Snap It’, you will be taken to the lender’s website where you can apply for the loan.
  • Approval: After application, the lender will verify all the information and get back to you with a loan offer.
  • Get Money Instantly: Once you accept the loan offer, the cash will be transferred to your account in 24 hours.
  • Repay Your Loan Quickly: Make sure that you repay your loan quickly. Usually, you can either pay the amount in a lumpsum or smaller instalments. Sometimes, a lender can place a debit order on your account so that as soon as you get your salary, the amount is deducted.

Features of payday loan

A payday loan is quite popular in South Africa and you will find several lenders giving different offers on the same. You can find payday loans under the following names:

  • Instant Payday Loan: In this type of payday loan, you will get your money instantly which is usually 24 hours.
  • Same Day Loan: In this type of payday loan, you will get the loan amount in just a few hours
  • Payday Loans for the Blacklisted: This payday loan is specifically meant for people who have a poor or bad credit score.

Other general features include:

  • You can get a small amount of money (Minimum-R100; Maximum- R8, 000)
  • Receive the money instantly just as your application is approved.
  • Repay the loan amount quickly (Minimum loan term-1 day; Maximum loan term- 6 months)
  • Payday loan has an initiation fee of 16.5% for the first R1, 000 you borrow, and then it is 10%
  • Higher interest rates, typically 5% per month
  • A monthly service fee of R60 per month with a VAT of 15%.

Benefits of payday loan

  • Cover your emergency expenses with payday loans immediately.
  • No need of carrying the debt for long. You need to repay the debt quickly.
  • Payday loans are unsecured and hence you don’t need to own a valuable asset.
  • The application process is fast and can be done without much hassle.
  • If you are an existing customer, you get to borrow more money up to R8, 000 and quite quickly.

Risks involved in payday loan

  • Delaying the repayment of a loan will increase the interest rates making it difficult for you to pay.
  • This will increase your monthly expenses making it difficult to manage your budget.
  • High penalty fees if you default on the loan repayment.
  • This can negatively affect your ability to get a loan in the future.
  • Frequent borrowing of a payday loan might result in a crippling debt situation.

Payday loan: What is the best time?

Well, truth be told, there is no best time to take out a payday loan. Most people don’t prefer taking out such short credit by having emergency funds in place.

Payday loans are taken only when it is utmost necessary. Usually, payday loans are the last option when all your other options are exhausted.

At Snappy Loan, we suggest our customers take out a payday loan only when necessary. Otherwise, wait till you get your salary or apply for a personal loan that has more flexible conditions.

Requirements for applying fora payday loan online

When you are applying for a payday loan online, you must fulfil the following requirement:

  • You should be either self-employed or employed at an organization
  • Valid ID issued by the South African government
  • South African bank account where your salary gets deposited
  • You must have a regular income that is deposited in this account. Some lenders also specify the specific amount of income you must have. Usually, it is R2, 000.
  • Proof of income for the last 3 months
  • You should 18 years of age or above
  • Proof of residence

Payday loan: How to compare different offers?

There are several factors that you must consider for comparing different payday loan offers:

  • The minimum and maximum amount offered: Some lenders will offer a limited loan amount whereas some will offer flexibility in the loan amount. Borrow what you need.
  • The repayment window: Choose a repayment term that offers you the flexibility to repay your loan quickly without putting too much strain on your budget.
  • Interest rates: Payday loans have higher interest rates as compared to other types of loans.
  • Additional fees: You might have to pay initiation and monthly fees. This will entirely depend on the lender.
  • Calculate repayment amount: Make sure that before taking the loan you have calculated the repayment amount.
  • Requirements: Make sure to check out the qualification requirements of the loan offer. Different lenders have different requirements.
  • How fast can you get the loan? Make sure that the lender you choose has the ability of quick turnaround when it comes to payday loans.

And to compare your loan offers, you can visit our website Snappy Loan. We have excellent payday loan offers from authorized and registered lenders and banks in the country.

You can review, compare, and apply for a payday loan with just a few clicks. If you want more information about a payday loan, don’t hesitate to get in touch with our team at Snappy Loan now.

Student loans

Looking for the Best Student Loan in South Africa? Read This!

Education is key to building a better future and a comfortable life. Even before you finish high school, you have to determine which degree you want to pursue. This means working hard towards getting admission to the right college or university. 

But as a student, your job to make your future bright just doesn’t end there. Once you get admission to your preferred college or university, you need to pay the course fees. Now, not everybody can bag a scholarship. This means you have to prepare your finances so that you can pay the fees on time and start pursuing your higher education. 

And student loans are the best way to tackle this situation. Yes, that’s right! Student loans are the right kind of finances that can get you through your college education without any issues. But before you apply for loan online there are a few things you must consider. 

Things to Consider Before Applying for Student Loan

Let’s start with breaking the biggest misconception regarding student loans. Most people will tell you that student loans are “good debt”. Sure, if you compare it with going into debt for a smart phone, a student loan is certainly a “good debt”. But always remember, you have to repay the loan eventually.

So, before you apply for a loan, get to know the following things:

  • How much you can afford?

This is certainly the first question you must ask yourself before applying for a student loan. Remember, that you have to repay the loan eventually. So, make sure that the total repayment amount is payable and you can afford it.

If you think that you can’t afford the repayment amount, it is best to stay away from making an application. 

  • Student loan Vs Other Types of Debts

When compared to other forms of debt such as personal loan, you can’t declare bankruptcy on a student loan if you fail to pay. 

Let’s get one thing straight! No matter what, you have to repay your student loan. Even if you fail to repay your student loan, the lender will make sure that they get their money back in full. 

This will be done by taking your wages and there is literally nothing you can do about it!

Also, in personal loans, if you fail to repay, the lender will ensure that they get something from you such as an asset that you will keep as collateral. 

But in student loans, YOU are the collateral!

  • Student Loan Application Checklist

Now, if you want to apply for a student loan, here is a checklist for responsible borrowing:

  1. Make sure to calculate how much money you will need to pay for your college years. Include not just your college fees but also your living expenses. This is how you will get a rough idea of how much need to loan.
  2. Remember that student loans have varied interest rates depending on the plan and the lender. Make sure to use a calculator for determining your overall interest rates.
  3. Always make sure to check any hidden or additional charges by clicking “view additional charges and information” on the lender’s page.
  4. Calculate the repayment amount after you finish your graduation
  5. Don’t just choose the first student loan plan you see. Compare different student loan plans to make an informed decision. 
  6. Determine that how much you will be able to make after you graduate. This will give you an idea of whether you can afford the student loan.

How to Apply for Loan Online

Now that you know what things you must consider before applying for a student loan online, let’s move forward to the process of application. 

You can either get loan online or you can visit the nearest branch of the loan provider to get the forms and understanding the different plans available. 

  • Requirements for Application

So, when you are applying for a student loan in South Africa, most loan providers will have the following requirements:

  1. You must be at least 18 years of age or above
  2. You have to provide proof of registration from a tertiary institution in South Africa
  3. You have to provide the latest examination results from the Department of Education
  4. You need to produce a proof of invoice detailing your college fees, living expenses, and books expenses
  5. You might have to open an account with the loan provider
  6. Specify whether you are studying part-time or full-time
  7. Specify the years of study
  • Things to avoid

Always remember, when you take a student loan, you have to repay it after your graduation. So, take on a loan only if you can afford it. Other than this, try to avoid the following things:

  1. Don’t use your student loan money for any other purpose other than the intended purpose, i.e. your education.
  2. If you determine that you can’t afford to take a student loan, avoid taking one at all costs. 
  3. Don’t jump on the first student loan option you see. Compare different plans. Several plans will be suitable for you. 
  • Student loans: Good or Bad?

Ah! This is an age-old question! Most people wonder whether getting a student loan is good or bad. But truth be told it completely depends on your circumstances. If getting a student loan is the only way for you to pursue your education, then go for it!

  • When Does a Student Start Repaying the Loan in South Africa?

Most student loan lenders will give each student a grace period of 3-6 months. This period is intended to give the student a chance to find a job and start earning an income. 

Once your grace period ends, you need to start repaying your student loan based on your plan. 

Before we leave you here with a lot to think about the next step, you can check out the latest student loan offers on our website Snappy Loan. 

All the lenders are operating under National Credit Act. So, you don’t have to worry about getting duped. Compare different loan plans you see on our website to make an informed decision. 

Debt Consolidation

Debt Consolidation Loan: Smart Way to Repay Your Debt

Most people apply for different kinds of loans during their lifetimes such as student loans, personal loan, car loans, and others. The biggest responsibility is to repay these loan amounts promptly. And that’s where most people struggle. 

They are unable to keep track of their repayments and forget to pay on time. This results in penalties and we know you certainly don’t want that! So, the best way to repay all your loans efficiently is through debt consolidation. 

What is debt consolidation?

Debt consolidation is a smart way of repaying all your smaller loan amounts with efficiency. This financial product will create a large load of debt by combining your smaller debts. 

This will give you a little breather and will allow you to pay the maximum of your loan amounts swiftly and efficiently. Also, if you are someone who pays his/her debt off quickly, you can save on interest rates too. 

Tips to Consolidate your Debt

  • Calculate the total debt that you owe
  • Calculate how much amount you can pay off quickly on your monthly repayment
  • Based on this calculation, contact a lender that fits your budget
  • Apply for credit with the lender
  • Once you receive the credit, repay your old loans
  • Start repaying the new credit as per the term and conditions with the lender

Secured Vs Unsecured Loans

Debt consolidation can be done for all types of secured and unsecured loans. 

Secured loans are taken using a property or an asset as collateral. This means that you need to repay your loan to release the collateral. If you don’t repay the loan amount as per the agreement, the lender has the right to take over your collateral property or asset. 

Secured loans consist of: Car finance, secured personal loans, business loans, secured cash loans, personal asset secured loans

Unsecured loans on the other hand don’t require you to put a property as collateral. Therefore, these loans have higher interest rates for the borrower and higher risk for the lender. 

Unsecured loans include student loans, credit card loans, short term loan, medical bills, and unsecured personal loans. 

Methods of Debt Consolidation

When it comes to different methods of debt consolidation, South African lenders give you numerous options. They calculate your debt size, your income, and credit score for determining the credit amount. 

Let’s look at a few different methods of debt consolidation:

  • Debt Consolidation Loan

This is one of the best ways to pay your old loans. The debt consolidation loan is a specific type of loan that you can use to pay your old loans over the years with the lowest interest rates. And the best part, you don’t need a guarantee or collateral! 

A registered South African lender can give you a debt consolidation loan up to R250,000 with interest rates as low as 15%. You only need to pay a small processing fee. 

  • Secured Personal Loans

If you want to get a large amount of credit, apply for a secured personal loan. You will easily get this loan even if you have a low credit score. 

All you need to do is have a property or an asset as collateral. 

  • Credit Card Balance Transfer

Another method for debt consolidation is transferring your balance debt amounts to credit cards, especially a new one. 

A new credit card has promotional interest rates which are as low as 0%. You can transfer your balance to such credit cards for low interest. Although, once these promotional interest rates expire, you have to pay standard interest rates. 

So, if you are planning on paying your debt quickly, only then opt for this method. 

  • Home Equity Loans

If you have equity in your home, you can use this to borrow credit from a lender. Using this credit you can repay your old loans.

But make sure to pay your home equity loans on time because if you don’t you can lose your home.

Debt Consolidation Loan Vs Personal Loan

Technically, debt consolidation loans and personal loans are not so different. You can get a personal loan for debt consolidation because personal loans can be used for anything. 

But debt consolidation loans are specific types of loans given by lenders for paying back your old loans. You can certainly choose what you want based on your needs. 

Advantages of Debt Consolidation

  • Manage your debts easily
  • Decrease your instalments and get a breather
  • Easy management of your debts will keep you away from being a high-risk customer

Disadvantages of Debt Consolidation

  • Won’t help you if your debt is too much
  • You might have to pay higher interest rates
  • Doesn’t make your debt disappear or fix them

Factors to Consider before Debt Consolidation

Although debt consolidation is a great way to manage your old loans, you have to be smart to create a plan that works. Here are a few things you must consider before opting for debt consolidation:

  • Can you manage the instalments? If you have taken a personal loan for debt consolidation, make sure that you can manage your monthly instalments.
  • What is the size of your debt? Calculate the size of your debt accurately. This is the only way to understand how much credit you can get that you can manage. 
  • Are you able to reduce the size of the debt? This is possible only when you cut on expenses and pay your debts. 
  • How is your credit score? Having a good credit score will ensure that you have lower interest rates on the personal loan. Otherwise, it can get difficult for you. 

Requirements to apply for a debt consolidation loan 

Whether you want to apply for loan online or in the nearest bank, the following are the requirements:  

  • Proof of bank deposits of salary for last three months 
  • Proof of income
  • Age should be 18 years or above
  • Proof of residence

Debt Consolidation: Frequently Asked Questions

  • When is the best time for initiating debt consolidation?

If you find that your monthly bill payments are more than you can afford, you must get debt consolidation. 

  • How does debt consolidation work?

Debt consolidation combines all your smaller loans under one account. This makes it easier for you to repay your debt. 

  • Do I have to settle my debts or will the lender settle them for me?

If you have credit from a lender that handles debt settlement, the lender will settle it on your behalf. But if you have taken a personal loan, it is your responsibility. 

  • How do I know that I qualify for debt consolidation?

Based on your income, credit score, and other factors, your eligibility for debt consolidation will be determined. Don’t forget to compare different lenders to find the best one.

  • Debt is someone else’s name. Can I consolidate it?

No! You can consolidate a debt that is in your name only. 

  • Can I improve my credit score with debt consolidation? 

Debt consolidation will improve your credit score in the short term. But if you want to improve your credit score, in the long run, don’t default on paying your debts. 

If you want to know more about debt consolidation loans or short-term loans, get in touch with us at Snappy Loan. We are a premier website in South Africa that will connect you with the right lenders in the country