Personal Loans in South Africa

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Loans in South Africa

A loan is a sum of money that is provided to you then expected to be repaid with interest. Loans in South Africa have traditionally only been available through banking institutions, however in recent years there has been a rise in alternative lenders offering loans online. Searching for loans in South Africa with Friendly Finance couldn’t be easier. Our comparison tables provide you with the clear information on reputable lending brands so you can make an educated and confident loan choice. You can also filter your results based on all kinds of criteria, including eligibility requirements, repayment terms, interest rates and more, to find a lender that matches your needs. Our tools are free to use so start your loan search today.

It is integral to your loan search that you understand the loan products available and which one best suits your situation. Here’s a look at the options available on the market.

Unsecured loans

This is a loan where the borrower does not need to provide collateral against the loan, with the loan being offered based on the customer’s affordability only. There is more risk in unsecured lending for the provider so the interest rates are usually higher, however these loans are very convenient and therefore are the most popular loans in South Africa.

The most common unsecured loans are short term and personal. Short term loans range from R100 to R8,000 with repayment periods around 1 to 6 weeks. Short term lenders will usually charge a daily interest rate, an initiation fee and a monthly service fee for managing your loan account. Personal loans range from around R5,000 to R125,000 with longer repayment terms up to 5 years. The types of charges are like short term loans but the cost of borrowing is higher due to larger loan amounts.

Secured loans in SA

A borrower in South Africa is required to provide an asset as collateral against a secured loan. The lender can take ownership of this asset if you fail to repay the loan to recuperate the money lent. Possessions that are commonly used as collateral include; boats, vehicles, houses and jewellery. As the risk of lending is less, you can be offered better rates on a secured loan. This may also be a good loan option for customers with poor credit ratings.

What you should know

There are a few things you should consider before taking out a loan:

  • Is the loan affordable? – Only borrow an amount of money you need and can afford to repay. If you borrow too much and are unable to meet the repayments, chances are you’ll incur additional fees and spiral into further debt. To understand how much you can repay, review your monthly budget to see how can be designated toward a loan repayment. Remember that you can reduce the total cost of a loan by borrowing over a shorter period, however each repayment will be more. You can also use our calculator to see how much you need to pay back.
  • Credit check – Lenders offering unsecured loans in South Africa will do a credit check on your application to assess your ability to repay the loan. The best rates tend to only be offered to borrowers with good to excellent credit scores. If you have a bad credit rating, you may want to take steps to improving your score before applying to receive a cheaper rate.
  • Search online – People often end up with unsuitable loans because they can’t access the information they need. Friendly Finance eliminates this issue by allowing you to compare and contrast a variety of loan options in one place. Our South African loan search and comparison tool is so fast and easy that you’ll identify a viable solution in no time. Start your search for a lender now by comparing the lenders below.

Loan support

At Friendly Finance we aim to provide you with all the information you need to make a quick decision. We work with responsible South African lenders so that you can have peice of mind when you apply for a loan. If you have any questions about your loan feel free to ask us any questions you may have and we will support you through the process.

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