Categories
All Personal Loans

Thinking of Getting an Absa Personal Loan? Read This Article Now!

Have you been experiencing financial issues and unable to cover your immediate finances? Or maybe you want to buy a home or car or need finances for some other personal expenses? If such is the case, getting a personal loan might be a great idea. 

A personal loan gives you the ability to cover your finances without putting immediate pressure on your budget. However, remember that you need to repay your loan over time every month. 

But which bank you should choose to get a personal loan from? The answer is simple. You can get a personal loan from Absa, a registered credit provider in South Africa. Absa personal loans will surely accommodate your needs easily. 

Sinceit is a registered credit provider, you can rest assured that you will be easily able to cover your finances. You can take out a loan between R250 and R350, 000. You can get a loan based on your individual circumstances and cover any personal needs you might have. Let’s get to know about Absa loans in detail in this article. 

Absa personal loans: How do you qualify?

Following are the requirements for you to qualify for Absa personal loans:

  • Proof of residence
  • Minimum age of 18 years and above
  • Valid South African ID book or card
  • Credit protection
  • Bank statements of the past 3 months as proof of income

For credit protection, you can either have your plan or you get the credit protection plan offered by Absa. 

Absa personal loans: How to apply?

Following is the process to apply for Absa personal loans:

  • Before you apply for a personal loan with Absa, you should use the monthly repayment calculator to determine your monthly repayment amount for a specific loan amount and term. Once you have found the monthly repayment amount that suits your budget, you can start filling the application form. 
  • To go to the website of Absa personal loans, you can click on ‘Snap It’ on our website Snappy Loan. This will take you to their website. 
  • If you already have an Absa bank account, you can directly login online using a tablet, mobile or PC. 
  • From the menu, you can choose Apply and Personal loans.
  • Fill the application form with the required details and submit the required documents.
  • Once your application is approved, the amount will be transferred to your bank account in a few hours.
  • You can either apply for loan online at the Absa website or visit your nearest Absa branch and talk with an official about the process. 

Absa personal loans: How much money can be borrowed?

When you apply for a personal loan online at Absa, you can get a minimum amount of R250 and a maximum amount of R350, 000. If you want a larger loan amount, you need to earn a minimum of R2, 000. However, if you are applying for a smaller amount, you need to earn a minimum of R1, 500. Also, smaller loan amounts up to R8, 000 get repaid in a short duration of 2-6 months. 

Absa personal loans: What are the repayment terms? 

To repay your Absa personal loan, you get a loan term of 12 months to 84 months. However, for current Absa customers, the minimum loan term is of 2 months. If you have taken smaller amounts, they usually get repaid in 2-6 months. 

Apart from an interest rate, the bank also charges an initiation fee and service charge on the loan amount.

Absa personal loans: What are the benefits?

  • With Absa’s personal loan, you don’t need to provide any personal property as collateral. This makes it easy for you to get a personal loan. However, the loan approval depends on your credit history.
  • You can find a personal loan calculator with Absa that will help you calculate your monthly repayment amount for a loan amount and term to help you make an informed decision.
  • Once your application is approved, the loan amount is transferred to your account quickly, usually, within a few hours.
  • With Absa personal loans, you can get competitive interest rates. 
  • With Absa personal loans, you also get credit protection. This ensures that your debt is paid in the event of an illness, disability, or death. 

Absa study loan: A brief introduction

Apart from a personal loan, you can also get a study loan from Absa. This loan will help you fund your education. Following are the things you need to qualify for an Absa study loan. 

  • Valid proof of South African citizenship
  • Proof of residence
  • Minimum salary of R3, 000
  • Acceptance or registration certificate for any undergraduate and postgraduate program from a university. 

The student loan offered by Absa is available for parents, guardians, and students who have a part-time or full-time job with proof of income. You can get a minimum study loan of R3, 000 and a maximum loan of R150, 000. 

You can use the Absa study loan for covering your costs for every year of your study. You can use the money to cover the expenses of 

  • Tuition fees
  • Prescribed textbooks
  • Accommodation
  • Registration fees
  • Any computer equipment that you might need to cover your educational needs

To apply for the Absa study loan, you can visit the nearest Absa branch, or apply through their student bureau or by calling their call centre. 

Absa express loan

The express loan offered by Absa is a type of short term loan that is usually repaid in 2-6 months. If you have a regular monthly income, you can get an express loan of a minimum amount of R1, 500 and a maximum amount of R8, 000. 

When you take the first express loan from Absa, you need to give an interest rate of 5%. If you take any subsequent credit in the same year, you need to pay an interest rate of 3%. You need to pay service and initiation fees as applicable. 

If you have a good credit score, you can get your Absa loan application approved in a few days. Once approved, you will get the amount in just a few hours. 

If you want to know more about Absa loans, you can visit our website Snappy Loan. You can search, review, and apply for Absa personal loans with just a few clicks.

Categories
Personal Loans

First National Bank Personal Loans: All Things You Must Know

The First National Bank (FNB) is amongst the leading banks in South Africa trusted by several people in the country. Being a certified lender under the National Credit Act, this bank is one of the best choices you can make if you want to take out a personal loan

But do you know the complete process of applying for an FNB personal loan? Do you have a comprehensive knowledge of different aspects of FNB personal loans? If not, keep reading this article to find out more. 

First National Bank- How do they work?

Briefly, in the First National Bank loans, you can take out a minimum loan amount of R1, 000 and a maximum loan amount of R300, 000. The minimum loan term is 1 month whereas a maximum loan term is of 60 months. 

The interest rates for FNB personal loan varies with a minimum interest rate of 12.75% and a maximum interest rate at 27.75%. 

Also, the overall process of applying for an FNB personal loan includes applying for a loan on the FNB website or in the nearest branch. You will also provide all the required documents with the application. 

Upon approval, the loan amount will be credited to your bank account. You can use the loan amount for any purpose you want and start repaying your loan on the agreed amount and term. 

FNB personal loans- How to use them?

FNB personal loans are a general credit loan, hence they can be used for several purposes such as 

  • Building your new home or renovating the existing one
  • Covering your wedding expenses
  • Use it to cover your holiday expense
  • Cover any other unplanned or planned costs

First National Bank personal loans- Advantages

Applying for a personal loan at FNB has several advantages. This is the reason why FNB personal loans are popular in the country. 

  • Based on individual circumstances and credit reports, FNB offers personalized interest rates when you apply for the loan. 
  • FNB offers flexibility in the loan amount. You can apply for a minimum loan amount of R1, 000 and a maximum loan amount of R300, 000. 
  • FNB loans also provide unsecured loans that mean you don’t need to give any collateral.
  • FNB loans provide flexibility in making repayments. You can maximum loan term of 60 months. Also, since you have a fixed interest rate, the repayment loan amount doesn’t change making it easier for you to manage your budget every month. 
  • FNB also protects its customers with a Customer Protection Plan (CPP). This plan is much like credit insurance that protects you in case you fail to repay your loan in situations like death, illness, disability, or a global pandemic. 
  • You don’t have to pay any penalty fees if you make early repayments. 
  • With FNB, you also get Take-a-Break January where you can skip repayment for this month if you have spent too much during the holiday season. However, this just an option. If you wish to repay in this month too, you can very much do so. 

Take-a Break January: Little more info

As mentioned above, Take-a-Break January is a convenient option offered by the FNB. In this option, you can skip your repayment for January. However, if you have enough budget for the month, make sure you make the repayment. 

Also, this option is available for those customers who have a loan term of more than 6 months. And to avail of this option, make sure you have an up-to-date monthly repayment deposits for the past months. 

FNB personal loan interest rates: Briefly explained

The FNB interest rate is capped at 27.75% as per the regulation set by the National Credit Act. Also, the bank provides a fixed interest rate.

This fixed interest rate is personalized based on the individual customer’s circumstances. The two factors that are considered for this personalization are the credit score and current financial conditions. 

FNB personal loans: How to apply online?

If you want to apply for loan online from FNB, you need to fulfil the following requirements:

  • You must be a valid South African resident
  • Must be 18 years of age or above
  • Must have a valid and active South African bank account where your salary is deposited
  • You must be either employed or self-employed

You also need to provide the following documentation during online loan application:

  • Your latest payslip
  • A valid South African ID issued by the South African government
  • Proof of residence
  • You need to provide 3 months of bank statements if you don’t have an FNB account
  • If you are self-employed and don’t have an FNB bank account, you need to give bank statements for the past 6 months

FNB personal loans: A few key points to know

  • Using an FNB personal loan calculator, you can calculate your monthly repayment amount. You can read our previous blog on FNB personal loan calculator on our website.
  • If you want to make an online loan application for FNB personal loan, you can visit our website Snappy Loan. We give you a quick way to review the latest loan offers from FNB bank. You can click on ‘Snap It’ and will be taken to the lender’s website for online application.
  • When you have applied for FNB personal loan, the loan amount will be credited to your account either in a couple of hours or a few days upon approval. However, the pay-out time also depends on the type of credit you are applying for. 
  • You can easily make your repayments for FNB personal loans. You can do it via FNB ATM, FNB app, online, and cell phone banking with EFT. You can also create a monthly debit order. Or you can deposit by visiting the nearest branch or ATM. 
  • With FNB loans, you also get a top-up option. If you have already taken out a loan with the bank, you can apply for additional funds. The maximum limit for additional funds is R300, 000 for a term of 60 months at fixed interest rates and no initiation fees. 
  • Apart from personal loans, you can also apply for student loans, debt consolidation loans, short term loan, revolving loans, credit cards, and overdraft loans. 

Now that you know everything about FNB personal loans, you can visit your nearest branch or our website Snappy Loan to make an application.

Categories
All Personal Loans

Personal Loan in South Africa: A Complete Guide!

As per the latest statistics, around 40,000 people search and apply for a personal loan in South Africa. If you are one of them, clearly you are not alone. But do you have a complete guide about a personal loan that will help you navigate your search and application?

Well, in this blog post, we give you a complete rundown of personal loan in South Africa. So, let’s get started, shall we?

Personal loan: What is it?

When you borrow money from a financial institution to cover any financial gaps, it is a personal loan. Since you have borrowed money from the lender, you ought to pay it back. Following are the general features of a personal loan:

  • You can get a personal loan for an amount between R2, 000 to R300, 000.
  • You need to pay back the money in a span of 1 month to 84 months (7 years)
  • You can use the funds for several general purposes such as covering wedding expenses, home renovation, buying a car, debt consolidation, and more.

Standard terms: Definition

  • Loan terms:
  • Principal Amount: This is the base amount that you borrow from the lender. This amount does not include any interest charges or any other fees.
  • Term of Loan: This is the time in which you need to pay back the loan amount. For a personal loan, the loan term is between 1 month to 84 months (7 years).
  • Interest: This is the amount charged by lenders on the borrowed amount. This can vary based on the lender as it is decided by the lender.
  • Monthly Repayment: This is the amount of money you pay back to the lender monthly. This amount is meant to cover your principal amount and interest rates charged by the lender.
  • APR: This is the annual percentage rate also known as the comparison rates. This rate includes all the other debt charges and interest rates.
  • Terms for your situation
  • Credit History: This is the history of all different types of loans you might have taken from the lender. It also shows how you made your previous repayments. In South Africa, you are entitled to have one complete credit report for free.
  • Credit Score: This score is evaluated from your credit history. The score indicates how good you are at repaying your debt. A credit score of 800 and above indicates that the lender can trust you for repayment of the loan. However, a credit score below 579 is not a good indicator. It shows the lender you can default on the loan repayment.
  • Drawdown: Once your application is approved, the lender will draw down the loan amount in your account. You can start using your loan amount as you want.
  • Defaulting: So, if you fail to pay your monthly repayment amount, you have defaulted on your loan. Defaulting can lead to a poor credit score.

Personal loan: How do they work?

Following are the steps generally involved in applying for personal loans in South Africa:

  • Compare Loans: There are different types of personal loan plans offered by lenders. Each plan has different terms and conditions. So, you must compare each credit plan before you choose the one that suits you.
  • Checking Qualification Requirements: Once you have finalized a loan plan that suits your needs and budget, you must ensure that you fulfil all the eligibility criteria such as minimum age or proof of income.
  • Contacting the Lender and Applying for a Loan: Once you fulfil the requirements, you can contact the lender and apply for loan online or going to the nearest branch office.
  • Approval and Agreement Creation: Once your application is approved, the lender will make a loan offer. Once you accept the loan offer, an agreement will be created that will have the terms and conditions for the loan repayment. Once agreed and signed, the lender will draw down the loan amount. You can start using the money for your needs.
  • Repayment: Usually, you must make monthly repayments to the lender. The amount will depend on your credit amount and interest rates. Make sure not to default on the repayment to avoid penalties.

Personal loan: What are the types?

Credit providers who are registered to give personal loan offer to people in South Africa provide different types of personal loans. The type you choose depends on your requirements and if and how you will repay it.

Following are the different types of personal loan:

  • Unsecured Loan: This type of personal loan doesn’t need any type of guarantee however, it comes with higher interest rates.
  • Secured Loan: This type of personal loan needs an asset or property as a collateral guarantee. The loan has lower interest rates and other perks too.
  • Debt Consolidation: If you want to repay all your smaller loan amounts in one go, a personal loan can be used as a debt consolidation loan. You will now have just a single account for a loan.
  • Student Loans: A type of personal loan, this is used to pay for your education and living expenses.
  • Lines of Credit: Just like credit cards, this type of personal loan comes with a maximum credit limit. The repayment depends on how much credit you have used.
  • Overdraft: When you withdraw a small amount of money even when your bank balance is low, this is known as an overdraft loan.

Personal loan: Minimum requirements

  • Self-employed or employed
  • Minimum 18 years of age
  • Must have a regular monthly income
  • Must have a South African residence permit or citizenship

Personal loan: Documentation

  • Valid ID issued by the South African government
  • Residence proof
  • Payslips for the past 3 months as proof of income
  • When you are taking a secured personal loan, don’t forget to give ownership proof for the asset you are using collateral.

So, now you know the basics of personal loans and how you can apply for them. To know more about the latest offers on personal and short term loan, don’t forget to check out our website Snappy Loan.

On our online platform, you can search, compare, review, and apply for a loan online. With just a few clicks, you will be approved for a loan offer and you can get the loan amount in a short while. Make sure to repay the loan amount without defaulting to avoid penalties. Visit our website to know more!

Categories
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.

Categories
Short Term Loans

Cover Your Immediate Expenses with Short Term Loans in South Africa

Having enough finances to cover your needs is of the utmost importance. But sometimes, there are instances when you don’t have enough funds to cover the expenses. This happens when these expenses come unexpectedly such as sudden medical expenses or business expenses. 

In times like these, you can apply for a short term loan to cover your finances. As the name suggests, short-term loans are meant for short periods only. In South Africa, several short-term loan providers consider 1-2 years for this type of loan. Therefore, if you opt for a short-term loan, you have to repay it within a year. 

When you apply for a short-term loan, you can expect to get a lump sum amount in 24 hours. And it doesn’t matter if you have a bad credit score; you can still qualify for a short-term loan. 

A short-term loan is a great way to tackle any immediate financial expense that is temporary. 

Short term loan features

  • When you apply for a short-term loan, the range of loan amount is R500 to R250, 000.
  • You have to repay the loan amount quickly in about six months to a year. 
  • Within 24 hours of application, you can get the complete loan amount in your account. 
  • As compared to a long-term loan, short term loan has higher interest rates. 
  • Although, it is cheaper to repay a short-term loan as compared to a long-term loan. 

Steps to apply for short term loans

  • Start by determining the loan amount you want to borrow. Make sure that you can repay it comfortably. 
  • Start by comparing different short-term loan offers and choose a lender that suits you. 
  • Make sure to agree with your lender on the following terms: the full amount you will repay, the interest rates, the loan repayment period, and repayment dates. 
  • After submitting your application, the lender will process it. They might check your financial history. 
  • Once you have been approved, the loan amount will be transferred to your account. 
  • You can start using the loan amount to cover your existing expenses while starting to repay the amount. 

Types of short term loans available

 When you start looking for short-term loans, you will find that there are different types you can choose from.

  • Payday Loans 

These are the most common short-term loans available in South Africa. A payday loan is taken when you want to cover some expenses but you are still waiting for your salary to credit. 

Once the salary credits to your account, the lender has the right to take the loan amount with interest. These are high-interest loans and need to be paid in one single instalment. 

  • Short Term Online Loans

In this type of loan, the complete process takes place online. You can directly visit the website of the lender, fill the application form, and await approval. 

Once approved, the amount is credited to your account. When it comes to repayment, the lender can directly take the instalment from your account. 

  • Merchant Cash Advances

This type of short-term loan is great for businesses that want to support their current lack of finances. When a business gets money from the lender, this gives the lender access to the business’s card terminal. 

Now, whenever the business gets payment from a customer through cards, the lender will deduct a small amount till the loan amount is paid in full. 

  • Lines of Credit

Just like credit cards for individuals, lines of credit can be called credit cards for businesses. They can borrow the amount to cover their finances based on the set limit. 

The businesses have to pay the amount back with the interest rates at a later date. Based on the amount borrowed via lines of credit, the monthly repayment amount is decided. 

  • Invoice Financing

This is another type of short-term loan for businesses, where they can apply for a loan against unpaid invoices. The loan amount is usually a small percentage of the total invoice amount. 

Once the customer has paid the invoice, the lender can take the amount borrowed along with interest rates and service fees. 

Advantages of Short Term Loan

  • Get Quick Access to Cash: With short-term loans, you can get quick access to cash. Since you have to repay the amount within a year, lenders usually don’t hesitate to release the loan amount after approval. 
  • Pay Less on Interest: With short-term loans, you get lower interest rate payments. This is because the debt has to be paid in full within a year.
  • Easy Approval: When it comes to short-term loans, there are no strict guidelines. You don’t necessarily need to have a good credit score. The main reason for easy approval is that the loan amount is less as compared to long-term loans. 

Disadvantages of Short Term Loan

  • Unreliable Lenders: Short-term loans can be easily accessed and approved but the biggest drawback is dealing with unreliable lenders. Sometimes, lenders charge higher interest rates and unreasonable fees. 
  • Penalty Fees: With short-term loans, penalty fees for relapse the repayment are quite high. 
  • Small Amount Borrowing: With a short-term loan, you can only borrow small amounts. If you need a larger amount, you have to go for long-term loans. 

Requirements for applying for short term loan online

If you want to apply for loan online, you need to fulfil these requirements:

  • A valid ID issued by the South African government showing your age 18 years and above
  • Bank statement to prove the bank account activity for the last three months
  • Proof of income

Conclusion

Short-term loans are an excellent way to cover your immediate expenses. But make sure that you can repay the loan amount in the given time. It can cost you high if you are unable to repay the loan. 

Also, if you want to check out and compare different short-term loan offers, make sure to visit our website Snappy Loan. We give you a comprehensive overview of the latest offers. Just Snap It! And cover your finances immediately. 

Categories
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