Comparison of Top Personal Loans in South Africa

Looking for the best personal loan? Want to see which providers have the offers that suit your budget? Need some tips on what to watch out for? Check out our guide to the top personal loan providers on the market and see which one fits your needs.

Comparison of Top Personal Loans in South Africa

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What Is a Personal Loan?

A personal loan is associated with an unsecured loan. It is a great way to get cash when needed for an emergency, debt consolidation, or a well-deserved overseas holiday.

Personal loans can range from R1 000.00 to R350 000.00. The repayment period could be anything from 12 to 84 months. Repayments are calculated at a certain interest rate per year. Once your loan is approved you will pay it back according to the agreed terms and conditions. A personal loan gives you cash quickly.

In this guide, we will be looking at what is available on the market and tips on what to look out for. This will guide you to see which option suits you best.

How To Apply for a Personal Loan

You can apply for a personal loan by either visiting a financial institution, telephonically in some cases or doing it online.

What Documents Would You Need When Applying for a Personal Loan?

  • Copy of ID (certified or original)
  • Salary slips (recent and generally 3 months)
  • Bank Statements (recent and generally 3 months)
  • Proof of Residence
  • For a secured loan you will need documentation proving that you possess a certain asset

How Much Can You Borrow?

The service provider will investigate your credit history and rating. They will also investigate your ability to repay the loan. Often your own financial institution will give you the best rate, particularly if you have a good history with them.

Your income less monthly expenses will determine your affordability. Your history illustrates your payment habits, good and bad.

Different Types of Loans - Personal loan - Credit card - Bank overdraft - Bond - Vehicle finance

Typical Questions for a loan application

  • Education
  • Employment status
  • Duration of employment
  • Monthly income.
  • Gross monthly income
  • Monthly expenses
  • Salary frequency
  • Address details
  • Do you own a property or are you renting?
  • Marital status
  • Dependents

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Examples of loan applications

I did two online loan applications, for a loan of R50 000.00 payable over 60 months. They are both online loan providers that work with a range of financial institutions.

These were the results:

Hippo

Monthly repayment – R1 751.00 Interest rate – 25% Total repayment – R105 053.00 Service fee – R69.00 Total Interest – R55 053.00

Loans Direct

Monthly repayment – R1 875.00 Interest Rate – 28.18% Total Repayment – R112 470.00 Total interest – R62 470.00

Standard Bank

Standard Bank offers 3 different types of loans namely Term Loans, Revolving loans, and Overdraft.

Term loan

  • Repay as per terms
  • You get a personalized interest rate
  • No early termination fees if you choose to pay your loan off sooner
  • You receive Ucount rewards (a decent rewards program with multiple benefits)
  • Your loan is insured in the event of disability, dread disease, or death
  • It is a fixed-term loan

Revolving loan

  • Repay 15% of your loan
  • Personalized interest rate
  • Funds will be paid straight into your bank account
  • No early termination fees
  • You can apply to increase your loan
  • Flexible term

Overdraft

  • Instant Cash
  • Your overdraft is a credit facility on your bank account and your income is paid into this account
  • No minimum monthly repayments
  • Interest is only paid on the amount that was used during the month
  • Your interest rate is linked to prime
  • Your overdraft can be insured

Most banks such as FNB, Absa, Nedbank, and Capitec have similar facilities.

Capitec bank personalized credit R25 000-50 000.00 Terms – 1 to 84 months Interest rate – 12.9%

Capitec bank personalized credit R50 000.00-R100 000.00 Terms – 1 to 84 months Interest rate – 14.2 %

Capitec bank personalized credit R100 000.00- R250 000.00 Terms – 1 to 84 months Interest rate – 16.3%

Get up to R250 000.00 that can be paid back over 84months. Choose a loan with fixed monthly payments that suit your pocket or choose the option that gives you the lowest interest rate. Credit is approved in minutes and the money is available immediately.

African bank debt consolidation loan R10 000.00 – R250 000.00 Terms – 12 to 72 months Interest rate – 15 % Combine up to 5 loans into one single consolidation up to R250 000.00 and get one lower payment.

African bank Personal loan R10 000.00 – R250 000.00 Terms – 12 to 72 months Interest rate – 15 % Direct Axis (A division of FNB) consolidated loans R5000.00 – R250 000.00 Terms – 12 to 60 months Interest rate – 15 %

Consolidate your debt into one monthly payment and improve your cash flow. They will settle all your debt on your behalf, and you can do what you want with the remaining money.

Direct Axis (A division of FNB) personal loan R5000.00 – R250 000.00 Terms – 12 to 60 months Interest rate – 15 %

Fast paperless application process with results in minutes. Funds will be deposited into your account within 24 hours. Free monthly statements and optional Customer protection insurance.

Nedbank home improvement finance – R2000.00 – R350 000.00 Terms – 6 to 72 months Interest rate – 24.75 %

Goods can be purchased at accredited stores. Straight forward application process.

Nedbank personal loan – R2000.00 – R350 000.00 Terms – 6 to 72 months Interest rate – 24.75 %

Moneyshop personal loan – Excellent Credit – R10 000.00 – R250 000.00 Terms – 12 – 72 months Interest rate – 15%

Moneyshop personal loan – Average Credit – R10 000.00 – R250 000.00 Terms – 12 – 72 months Interest rate – 24.75%

They will find the best loan suited to your profile. They have partnered with the top SA personal loan providers. The online application process is quick and easy. All you need is to have a regular income of at least R4000.00, bank statements, and an RSA ID.

Conclusion

For a loan for up to R100 000.00, the clear winner is Capitec Bank. They have the lowest interest rate and the longest terms. Their application process is easy and simple.

For a loan over R100 000.00, you might opt for Direct Axis or African Bank. African bank has longer payment terms with means your monthly installment will be lower.

Nedbank is the most expensive option with the highest interest rate. So, whether you want to consolidate debt, or treat yourself, choose wisely. Never extend your credit beyond your means.