Rising unemployment, soaring food inflation and a recessionary economic climate mean that more and more South Africans are looking to loans to get by.

If your credit rating is poor, your chances of securing a traditional bank loan are low. But there are reputable lenders who specialise in providing blacklisted loans, with reasonable terms and at affordable rates of interest.

What are blacklisted loans?

Blacklisted loans are short-term secured lending solutions designed for people who have a poor credit rating. These are South Africans who have defaulted on account payments, or have had court judgements against them for failing to settle outstanding debts.

‘Blacklisted’ is a figurative term that refers to negative criteria on a credit record. It doesn’t mean you can never borrow money from a regulated legal entity or financial institution.

It simply means you have to provide collateral to secure the loan, and pay higher interest rates in line with the higher risk of lending you cash.

What is a poor credit rating?

Your credit score is a numerical value attached to your financial history. It reflects your ability to pay creditors on time and in full, according to the terms and conditions of the contract.

If you have a bad credit score, banks and other unsecured lenders are less likely to grant you a loan. The probability of you failing to pay the instalments is simply too high, and there are no assets to offset the loss.

Credit scores fall into four basic categories:

• 619 or below: the lowest available credit score. It reflects a very poor credit rating. You are unlikely to qualify for credit from any registered lender, apart from asset-based loans providers.
• 620 to 679: indicative of a poor credit rating. You are only eligible for a blacklisted loan, provided you have collateral as security.
• 680 to 716: your credit rating is good, and you qualify for unsecured bank loans at competitive interest rates.
• 720 and above: banks and other financial institutions are more than happy to lend you large amounts of money at the best possible terms. Expect to benefit from below prime rates.

If you want to know what your credit rating is, you can request a free credit score or copy of your credit report from credit bureaux, such as Credit Reports SA, Experian, TransUnion, and Credit Bureaus.co.za.

How do loans for the blacklisted work?

Lenders specialising in blacklisted loans work on the premise that if you default on any of the payments, or fail to pay off the debt, they are covered by the value of the assets you have pledged as collateral. They are legally entitled to confiscate and sell the valuables to cover the cost of the outstanding loan plus interest.

Blacklisted loans from Lamna

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 you provide an asset as security for a loan, we have no interest in your credit rating or other personal financial details – it’s the independently appraised value of the asset that determines the loan amount we offer.

For more information about using an asset to secure a short-term loan, contact us on 086 111 2866 or simply complete and submit our online application form.