Let’s face it no matter how much we earn sometimes we all need some extra cash. Well, if you find yourself in a situation where you need extra cash what should you do? A personal loan can be a very good option to help you meet your financial need.
The following are some of the things you might get a personal loan for:
- Funeral expenses
- Education expenses
- Home improvement expenses
- Medical expenses
- Wedding expenses
- Vacation expenses
- Car financing
- Business start-up expenses
- Household purchases
The above list is not exhaustive of all the things that you will need a personal loan for. You can get a personal loan to meet any emergency which may come up.
There are two types of loans that you can get:
- Secured loan – As suggested by the name this is a loan that is secured against your assets such as your house for example. In other words, you put up some collateral in order to get the loan. The challenge is that you face the risk of losing your assets if you fail to pay back the loan. The interest rates on such loans are generally low.
- Unsecured loan – This is the second type of loan you may apply for. This is sometimes referred to as the signature loan as there is no collateral involved but just your signature. This type of loan has higher interest rates than the secured one as it is more risky to the lending institution.
After you have decided that you need a personal loan the next thing you will need to determine is the source. There are a lot of financial institutions that offer personal loans in South Africa including a variety of banks. I would recommend approaching your own bank as a first stop as you are already their client and they know you as a customer.
Find out their personal loan terms including the interest rate they are willing to offer you. Also phone around and find out what other bank are also offering in order to get a comparison. This is important as your bank does not offer you the best deal always. You can also extend your search to other financial institutions that are not banks as we have quite a number of them in South Africa.
After you have found the lender offering the best rates submit your application and be sure that your documentation is in order.
On this site we take a look at some of the institutions you can approach for a personal loan in South Africa. We also discuss the different loans they offer including the required documentation.