Payday loans online in South Africa are an easy and instant way to get cash, but it doesn’t mean you can 100% afford them. Before making mind about payday loans, there are many important factors you need to know. Here’s a simple guide showing three crucial things to consider for making your borrowing decision right.
1. How quickly do you need the money?
For example, ask yourself questions like ‘How soon will I be able to get rid of it when you apply for a payday loan?’, ‘When do I need the money?’ and “Will I be able to afford what I borrow when I need it?” These questions usually assist you to play it safe.
Payday loans are a kind of short-term loan meant to deliver quick cash — often on the same day someone applies for the loan — but they, too, must be paid back very quickly. Thus, payday loans are the most suitable lending solution for anyone who wants to enrol with a modest amount and clear payments within a brief time frame. These short-term borrowing alternatives should not be used for longer-term financial obligations.
Payday loans have an edge over traditional means of borrowing credit, such as banks; they are often much easier to apply for, rendering the process more convenient for the applicant. Normally process is simple and online. Simply meet the lending criteria, clear the affordability checks, and loan proceeds — if approved — the amount will be credited directly to the bank account within an hour or on the same day.
When choosing a payday lender to apply, pay particularly close attention to the cash dispensation speeds advertised on the lender’s websites. Its preferable if you can get one who can fund your bank account and you can agree on a date.
Always pre-arrange the information and required documentation before apply, if you want an instant approval and funds. It will make an application faster-up and you will get money in the preferred time.
2. Do you meet the eligibility requirements?
Another crucial prospect when applying for payday loans online South Africa is to check eligibility requirements. Usually, payday loans are offered at minimum requirements, which includes over 18 years of age, holding valid bank account, ZA citizen, and ability to repay on time.
However, payday lenders not focus more on borrower’s past credit history, but they may request you to show your income proof and employment status. In this way, they confirm and ensure that borrower have something to repay the lent money on time without difficulties.
The good aspect of a payday loan is that even if you have a low debt ratio or your credit score suffers, it doesn’t mean you won’t be able to secure an online payday loan. Remember that payday loans with bad credit or no credit checks come with higher interest rates and lower loan amount limits.
The best way is to directly contact your lender or check its website for lending criteria before starting the application process. Turning down for a payday loan or any other loan can easily lower or damage your credit score. You will face more difficulties and expensive credit options in the future.
3. Have you read the terms and conditions?
Before you making your mind to apply for a South African payday loan, ensure you thoroughly read all the terms and conditions of your lender. In most cases, you find terms on your lender’s website clearly; if not, ask your lender directly. Check Frequently Asked Questions on their website, which helps you find possible questions and answers like how to apply, who is eligible, and what documents are required.
Payday Gorilla team decrease your work by showing some important factors to check when you looking into lender’s terms and conditions:
See if your lender imposes extra charges or fees
There are some payday lenders who will charges extra fees with interest payable on the loan. For example, lenders charges extra fees on late or non-payment or early loan repayment. Pre-calculate the overall costing of your loan and see whether you afford loan with these fees or charges or not.
What if you miss a payment?
Your loan terms and conditions clearly show what happens if a borrower can’t able to make a repayment. Usually, lenders enforce late or non-payment fees from the borrowers, which may lead to paying more interest on the loan if it takes longer.
If you are facing difficulties in paying loan repayment, best way is to talk directly with your lender. Most of the payday loan responsible lenders always have an alternative repayment solution. However, remember that you have to larger interest rate payments over the life of the loan.
Check interest rate payable on your loan
Interest rates also known as Annual Percentage Rate (APR), which denotes overall cost of the loan as a percentage (%) of the amount you are borrowing over a whole year. If you are applying for payday loans or short-term loans, APR is not the only key, instead of it, try to find the Total Amount Repayable (TAR) or simply compare the interest rate and extra charges, if charged by the lender.
Conclusion
When you’re facing a shortage of cash, it can be very tempting to fill out a five-minute online application and get the money you require through a payday loan in South Africa. But the quickest way isn’t always the best way, and always remember that payday loans come with a high cost, too.
Before applying for a payday loan or short-term loan, ensure you can afford them. If you can’t make repayments, try payday loan alternatives or borrow money from family or friends. Effective budgeting also can help you avoid the payday lending cycle and help you reach your financial goals.
