Types of loans that South Africa can apply for online include debt consolidation, home loans, bridging finance, personal and business just to name a few and there are many registered credit providers that offer this kind of borrowing over the Internet.
The real beauty of this is that you do not have to spend ages on the phone being put on hold by an operator or have to answer lots of spur of the moment personal questions that they may ask you while you are unprepared.
There is no filling out long winded forms and having to trek on out to a finance provider physically, everything can be done from the comfort of your own home or office.
Applying for loans online in South Africa is becoming more popular due to how quick the approval process can be with most approvals being finalised within just a day or two.
Student loans, business, short term and small loans are all available for people who are looking to borrow extra money for whatever reason. Basically, the better a persons credit history is, the more chance they have of qualifying for any types of finance and the quicker the approval will generally be.
Five different types of loans that you can apply for:
#1: Open ended loans
An open ended loan is a loan that can be borrowed off again and again. An example of this type of loan is a credit card and a line of credit.
This sort of loan has a limit of credit that you are allowed to spend. As you take money out, your allowed amount decreases, but as you make payments back in, your allowed amount increases again.
#2: Secure loans
A secure loan is a loan that relies on some form of collateral to support the loan. If the individual does not or cannot make their loan repayments, the financial service provider is within their rights to take possession of the asset to cover their loss on the loan.
In order to take out this sort of loan, the collateral is usually appraised first to find out its value. A benefit of this sort of loan is that the interest rates are usually much lower than an unsecured loan.
#3: Home loans
A home loan or mortgage is a loan used to purchase a property of some kind. This sort of loan requires a deposit of up to 20 percent of the total loan and will endure longer than any other type of loan.
The property will usually stand as collateral for the loan, meaning that the bank can repossess it if need be.
#4: Debt consolidation loans
A debt consolidation loan is taken out to cover a myriad of other debts. This is usually done so that individuals only have one loan to pay off rather than several and to secure an overall lower interest rate.
#5: Advance-free loans
Advance-free loans should be avoided as they are usually scams. A borrower is convinced by the lender to send in an ‘advance’ to qualify for the loan and then they disappear, stealing the advance.
How can you qualify for a loan?
To qualify for a loan from a reputable financial service provider, an individual would have to meet several requirements to qualify for almost any type of loan.
The following factors are some requirements that would have to be met:
- A reliable, steady income
- A good credit record
- No problematic debt
How to avoid getting overwhelmed by debt
It is very easy for anyone to become overwhelmed by debt in today’s fast paced world. Individuals are very tempted to take on more debt than they can handle because it is so easy to qualify for debt.
In order to avoid becoming overwhelmed by debt, you should take note of the following tips and hints:
- Do not take on debt for something that you do not really need.
- Make sure you get the lowest interest rate possible.
- Always read the fine print and take note of what you are signing before you sign up for a loan.
- Make sure that you always pay your debt in full and on time every single month, even if it means cutting back on your other expenditure for a short time.
Where should you apply for a loan?
You should only apply for a loan from a reputable financial service provider. Make sure that you research the company you are thinking of getting a loan from and look into reviews.
Reputable financial service providers are the best option for getting credit from. The following are some of the reputable financial service providers that you could think of approaching for a loan:
- First National Bank
- Standard Bank
- Capitec Bank
What financial service providers should you avoid?
You should always try to avoid financial service providers that are less well-known and that do not have a long standing good reputation and a large base of happy and satisfied customers.
Many less reputable financial service providers are actually loan shark agencies who use devious methods to convince individuals and companies to take out loans with them. They will charge high, compounding interest rates that increase very quickly to almost 1 000 percent.
It is definitely a good idea to avoid these sort of companies if possible.