Fast loans are designed to help South Africans through tricky financial patches, quickly and easily. In some instances, however, speed and convenience come at a cost.
If you’re in a tight spot and need immediate access to funds, here are the most popular fast loans available in South Africa, together with their pros and cons.
Personal bank loans
All the major South African banks offer short-term personal loans. Applications are submitted online and processed almost immediately.
If you’re an existing client and your credit history is good, funds are transferred into your account within 48 hours.
The rate of interest charged is determined by your credit score. Problems arise if you fail to repay the funds according to the loan agreement.
When that happens, the bank is entitled to recoup its losses by seizing your assets.
Pros:
- reasonable interest rates
- quick loan turnaround time
- no collateral required to secure funds.
Cons:
- high risk of asset seizure due to loan default
- credit history is the key qualifying criterion.
Pay-day loans
Pay-day loans are short-term solutions for permanently employed South Africans. These loans are usually limited to a few thousand rands and are payable, in full, on the following payday.
As the funds are not secured by an asset, interest rates are much higher than other fast loans. There are high administration fees and hefty penalties for late payments.
Pros:
- anyone with a regular income qualifies for a loan, regardless of credit score.
Cons:
- high interest rates
- penalties on late payments
- a sector traditionally dominated by unregulated lenders.
Mortgage bond loan
Homeowners who are up to date with their bond payments can access the funds they have already paid to the bank, in the form of a loan.
If you don’t have an access facility on your bond, you’ll have to apply for one at your bank.
Your monthly bond payments are automatically re-adjusted upwards to reflect the loan. If you default on the payments, the bank is within its rights to repossess your property.
Pros:
- competitive interest rates
- funds can be transferred from your bond account into your personal account at an ATM.
Cons:
- increases the amount you owe on the bond
- a high-risk fast loans option.
Lamna offers same-day loans secured by high-value movable assets.
For example, you might use a luxury watch, a diamond ring, a motor vehicle or an original artwork to secure a loan.
You can apply online or over the phone, and get an immediate loan offer. To proceed, you’ll need to bring the asset to one of our branches so it can be appraised.
We’ll then make a final offer and, if you accept, transfer the funds directly into your bank account – on the same day.
We keep the asset in a secure, access-controlled facility for the loan duration. As soon as the loan and interest are repaid, and according to the terms of the agreement, the asset is returned to you.
Pros:
- competitive interest rates
- flexible terms
- no qualifying criteria, credit checks or supporting documentation required.
Cons:
- the asset can be sold to cover the loan if it isn’t repaid.
For more information about using an asset to secure a fast loan in South Africa, contact us on 086 111 2866 or simply complete and submit our online application form.
ILLUSTRATIVE EXAMPLE
Client borrows R10,000 for 90 days.
Loan Amount | Repayment Period | Monthly Interest | Total Cost of Loan | Initiation Fee | Monthly Fee | APR |
|---|---|---|---|---|---|---|
R10 000 | 3 months | R500.00 | R2 914.50 | R1 207.50 | R569.00 | 60% |
Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.