Short term loans

Useful tips for your next short term loan search

A short term loan is a small loan amount that is paid back over a short period of time, usually on your next payday. With loan amounts from R100 to R8,000, there are many lenders offering finance in South Africa.  We often get questions from consumers who are new to online loans and would like to know more about them. If this is you, read through this article to get a better idea of short term loans in South Africa.

Where can I find a short term loan?

In the past, short term loans were offered by storefront lenders and banks. Online loan products have been on the rise over the last few years and are available throughout South Africa. You can find an online lender through our application at Friendly Finance. We only work with lenders licensed by the National Credit Regulator meaning they abide by the national rules and regulations. This means your personal information and loan will be safe and secure.

Am I eligible?

Every lender offering short term loans in South Africa will have different criteria to meet to be accepted for a loan. This is due to the different lending models they use. To apply for a loan, there are basic criteria you will need to meet. As a rule of thumb, you will need to meet the following:

  • A South African resident
  • Employed with a steady income
  • At least 18 years of age
  • Have a bank account.

The lender may do a credit check during the loan process and your credit score will influence the lender’s decision on whether you can afford the loan. If you have a bad credit score, you may still be approved for a loan as short term lenders are more interested in your current financial standing compared to your financial history.

Searching for a loan – shop around!

Before applying for a loan, it is worth shopping around to make sure you are getting the best deal. Every short-term lender will have a different set of lending criteria and it is possible that you will receive a better offer from one lender than others. You also want to make sure that the lender you plan to apply with is a safe and trusted lender. Applying with a lender without a license, for example, could lead to very high interest and costs, as well as to harassing debt collectors contacting you.

Applying for short term loans

Tips for finding lenders

Lending criteria – Every lender will have a set of basic criteria that need to be met for them to consider lending. The criteria usually include; age, your housing, employment and income. Make sure you meet these criteria before choosing to apply with a lender.

Look for the fees charged – Short-term loan lenders should tell you the average interest rate, loan application fee and monthly service fee that is applied to a loan. The actual fees may vary with loan amount and loan term. Use these fees to gauge if the loan is affordable for you.

Look for a license number – Every lender should be licensed by the National Credit Regulator. A licensed lender will display their NCR number somewhere on the website (usually in the footer). Look out this number and avoid lenders that aren’t licensed.

Look for a secure website – A lender’s application page should be secure in order to protect the personal details you provide during the application process. A secure page will have the prefix ‘https’ rather than ‘http’.

How do I apply for a loan?

Submit an application for a loan. The application for a short term loan is usually the same across all lenders. The first step will be to complete the online application form. Other than the loan amount and term most lenders will ask for:

  • Name
  • ID Number
  • Home address
  • Number of Independents
  • Employment status
  • Income
  • Cell and email address
  • Bank Details

You will also need to provide your three most recent monthly payslips or bank account statements to prove your income. Depending on the lender, this may be required as part of the application, or once you receive pre-approval for a loan. The documents can be uploaded on to the lender website making the process simple and quick.

After you finish the application and click submit, the lender will begin to check the information. Under the National Credit Regulation, all lenders must check the information and run a number of checks on you to decide if you can afford to repay the loan. Some lenders will also run a credit check on you, although short-term lenders are often less concerned with a bad credit score as the loan term is short.

The checks are done very quickly, and you should receive a decision within a few minutes from the lender.

short term loans approved

Decision Time


If you are approved for a loan you will receive a loan agreement to sign.

Tip: The loan agreement will outline the full cost of borrowing, including the potential fees and charges for late payment. You do not have to sign the loan agreement and if the fees seem too much, you can still walk away at this point. It is worth reading the agreement carefully before signing to make sure you are happy with the total cost of borrowing.

Once you have signed the loan agreement, the lender will tell you the date of repayment and the funds will be transferred to the bank account you gave to them in the application. The time taken to receive your funds will depend on your bank, but as a rule of thumb, you can expect to have the funds the same day or next business day.


If a lender declines your loan application you have the right to understand why. If the response you receive does not outline the reason and you want to know why to contact the lender directly and request the reasons.

Why would I want to know? Understanding the reason for being declined for a loan could help you find credit next time. For example, if your credit score was too low for the lender to make an approval decision, you may opt for a secured (asset-based) loan option next time where credit scores are not taken into account.

Tip: Submitting an application with a lender is usually free. You may then think ‘I’ll just apply with every lender until I am approved’. Although this is possible, it is not recommended. Every time an application is submitting to a lender, they are likely to run a credit check on you. Having multiple credit checks run in a short space of time can negatively impact your credit score, which may affect your chances of being approved for credit in the future.

Short term loans declined

How do I repay my loan?

Short term lenders will usually set up a direct debit to take the money from your account on the agreed day. This means that you have nothing to do other than make sure you have enough cash in your account to meet the repayment.

Who can I trust?

There are so many online companies offering loan products that it can be difficult to know who to trust. This is where Friendly Finance can help. We search the internet and research the most trusted lenders in the loan industry who are based in South Africa so you can be sure you’re making a safe choice. We also collect the important information on the loan products and display this in an easy to understand and clear format, allowing you to make an informed loan decision. You can start your search now using our loan application.

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