What Credit Score You Need to Get a Loan in South Africa

What Credit Score You Need to Get a Loan in South Africa

How your credit score affects your ability to get a loan in South Africa.

When you get an asset-based loan from Lamna, your credit score is irrelevant because the loan is secured by a physical asset and based on that asset’s resale value.

However, in order to qualify for an unsecured loan, such as a bank loan, you require a healthy credit score.

What is a credit score?

A credit score is like a report card based on your credit history. Being heavily in debt and missing repayments negatively affect your score. Good credit behaviour, like paying on time and not missing any payments, improves your score.

How to check your credit score

There are a few online sites that allow you to check your credit score for free. Knowing your credit score before you apply for credit can help you anticipate the outcome.

To get your score, you’re required to create an account and supply some personal information:

Good vs. bad credit scores

There are four main credit bureaux in South Africa – Experian, TransUnion, Compuscan and XDS. Each bureau has its own system for calculating your credit score, but they all give scores represented by a number range.

For example, Experian’s scoring ranges from 0 to a maximum of 705. A score below 527 is a Very Poor credit score, 528 to 602 is Poor, 603 to 649 is Fair, 650 to 669 is Good and above 670 is Excellent.

What credit score you need to get a loan

Generally, you need a score between 610 and 640 to qualify for a home loan or personal loan from a bank.

If you have a credit score in the range of 670 to 739, you should qualify for larger loan amounts and better loan terms.

Common credit-score problems

Many things can affect your credit score either fairly or unfairly. For example, never having had credit will give you an unfairly poor score because there’s no data to base the score on.

Being unemployed will negatively affect your score even if you have income from investments.

If you believe there are errors on your credit report, contact the bureau and challenge the information.

How many South Africans have bad credit?

According to the most recent report from the National Credit Regulator, the number of impaired credit accounts increased from 19.88 million (23.12%) to 20.66 million (24.24%) in 2020.

Why consider a loan from Lamna?

With an asset-based from Lamna, your credit score isn’t a consideration. Neither is your current employment status or financial history.

Instead, it’s the value of an asset you supply as collateral that determines our loan offer.

We also don’t share information with credit bureaus or any other third parties. So a loan from us won’t affect your credit score.

So if you’re wondering what credit score you need to get a loan in South Africa, the answer is – with Lamna – your score simply doesn’t matter to us. 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.

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.

APR & Loan Repayment Period

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.

Non-Payment

Non-payments may result in the matters being escalated.

Renewals

All accounts may be renewed if they are up to date.

Collection

All payments are made via EFT or direct deposits into Lamna’s bank account. There are no debit orders.

What Credit Score You Need to Get a Loan in South Africa

Apply Online

Hidden

What Credit Score You Need to Get a Loan in South Africa

Apply Online

Hidden

What Credit Score You Need to Get a Loan in South Africa

Apply Online

What Credit Score You Need to Get a Loan in South Africa

Apply Online