Getting a loan when you’re unemployed in South Africa can be a challenge. One straightforward option is to get an asset-based loan from lamna.
Challenges of getting a traditional loan without proof of employment
Mainstream lenders, including banks, typically consider three factors when evaluating a personal loan application:
- credit profile
- debt-to-income ratio.
By using this information, the bank assesses the applicant’s credit risk and his or her ability to pay back a loan, together with the added interest.
A key requirement for any unsecured loan is proof of employment. If you can’t provide your latest pay slip and bank statements for three months, the loan application is unlikely to be approved.
There are finance providers that offer short-term loans without proof of employment. These loans are typically subject to punitively high interest rates. They require proof of regular income, such as interest, dividends or income derived from a rental property, trust fund or pension.
Borrowing from a loan shark
Of course, you have the option of approaching unregulated lenders, commonly known as loan sharks. The odds are you’ll pay very high interest rates and, should you skip a payment, exorbitant penalties.
In extreme cases, you could put yourself and your family at risk. Illegal personal loan providers are notorious for their gloves-off approach to debt collecting.
Getting an asset-based loan when you’re unemployed
A solution that could work if you’re unemployed is an asset-based, short-term loan, which we offer at lamna.
You offer a tangible asset, like a car, boat, jewellery, artwork, antique or luxury watch, as collateral for a loan.
There’s no need for credit checks, interest rates are NCA-regulated and, once you’ve paid off the loan and the agreed interest, your asset is returned to you.
Why no proof of employment is required
An asset-based loan is a type of secured loan. It uses the intrinsic value of the item you’ve handed over as collateral to cover the funds.
As we hold the asset over the loan term and are entitled to sell it should you default on the monthly repayments, your employment status is of no concern to us.
When this loan type makes sense
This type of loan can be a handy financial tool if you have the income to repay the borrowed funds, plus the agreed interest.
It can alleviate a short-term cash crunch, as you wait for the expected in-flow of funds or pay for expenses you’re unable to cover up-front.
When a personal or business opportunity arises that you don’t want to miss, a loan from Lamna is a quick, easy and convenient way to raise the funds you need.
Benefits of an asset-based loan
There are a number of benefits of an asset-based loan, including:
- no effect on credit rating
- competitive interest rates
- no proof of employment or income required
- funds available within 24 hours
- flexible repayment terms
- no hidden fees or early settlement penalties.
How Lamna can help: getting a loan when you’re unemployed
At Lamna, we offer fast, discreet loans against the value of a wide range of assets, from luxury watches and jewellery to vehicles or artwork. Because the loans we offer are secured by assets, we have no need to consider our clients’ employment status, credit ratings or any other personal information about them.
|Loan Amount||Repay Terms||Monthly Repayment||Total Repayment||Initiation Fee||Monthly Fee (Interest + Service charge)||APR|
|R10 000||3 months||R568.40||R12 902.20||R1 197||R560||60%|
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