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90 day loans
What you need to know about how these short-term loans work before you apply.
90 day short-term loans can be an attractive option when you need money fast and can’t qualify for a normal loan. They’re potentially more manageable than your traditional payday loan, which you have to pay back in full with your next paycheck. However, a longer term typically comes with a higher interest rate, making your loan more expensive. It can also be difficult to find a lender that offers instalment loans with such a short term.
How do 3-month payday loans work?
Three-month payday loans work like any kind of instalment loan: You borrow money upfront and pay it back plus interest and fees over three months. Loan amounts range from around R500 to R4,000, though some three-month short-term loan providers offer loans as large as R8,000.
Many 90 day short-term loan providers have online and in-store applications. If you apply in-store, you could get your funds during your visit. With online applications, you can often get your funds in as little as the next business day.
Are payday loans right for you? Payday loans often come with high interest rates so always have a plan in place on how you will pay them back.
How much do 3-month payday loans cost?
Short-term loans are expensive and three-month payday loans are generally no exception. To prevent uncontrolled debt and unethical lending, the National Credit Act (NCA) of 2005 was established to imposed regulations on the interest rates and admin fees that are associated with these “short-term transactions”.
Under the NCA, lenders are only allowed to charge up to 5% interest (which converts to an APR of approximately 80%) per month, a maximum cap of R57 for service fee and an initiation fee. The limit on initiation fees is 15% on the first R1,000 plus 10% on any amount on top of it. Arrears fees also apply if a customer misses a repayment.
Am I even eligible for a 90 day payday loan?
Different lenders have different requirements. However, lenders typically require borrowers to:
- Be at least 18 years of age
- Be a South African citizen or permanent resident
- Earn a monthly income of R5,000 or more
- Have a steady job or source of income
- Agree to a credit check
- Not currently under debt review
How can I find the right 3-month short-term loan for me?
Ask yourself the when comparing short-term lenders to make sure it’s a right fit:
- What are the available loan terms?
Payday loans can range from 5 days to 6 months, but not every lender provide short-term loans exceeding one month. So if you’re more comfortable with a longer term, make sure to check if the lender offers it.
- How much does it cost?
Many short-term loans providers charge a host of fees besides interest, such as initiation fees and service fees. It usually varies based on the amount you borrow and loan term.
- Are applications from people with bad credit accepted?
Lenders who offer three-month payday loans are more relaxed in their requirements and are willing to give you a chance even if you don’t have the best credit history.
- What kind of repayment flexibility is there?
Some lenders allow you to repay the loan amount ahead of time without charging penalties so you can save on the cost of your loan.
- What is the processing time?
Applying for a three-month payday loan is usually a quick process, but some lenders are faster than others. With in-store applications, you could receive your loan immediately after approval. If you apply online, you can expect the cash to be disbursed to you within the same day or the following business day.
How do I apply for a 90 day payday loan?
You can usually apply for a 3-month payday loan online or in the store, depending on your lender. Licensed credit providers usually indicate their registration number on their terms page, so be sure to check that you’re borrowing from a legitimate lender.
Filling out the application typically only takes a few minutes, as does approval. Most lenders ask for the following documents and information:
- ID documents
- Proof of residence
- Employment proof and history
- Bank account number
- A recent pay stub or other proof of income
Benefits and drawbacks of 90 day short-term loans
- Quick approval. If you’re applying for a 3 month short-term loan at a store, you’ll get your approved funds as soon as you accept the loan’s contract. If you’re applying online, you’re likely to get your money transferred into your bank account the next business day.
- Bad credit is OK. Being approved for a 3 month short-term loan with bad credit is possible because most short-term lenders sometimes don’t run credit checks. They often look for your ability to manage repayment.
- Online and in-store options. You can apply for a three-month instalment loan from your bedroom or go in person if you need money right away.
- High APR. Payday loans often have a high APR, meaning you have to pay much more in fees and charges than you would with a traditional loan from a bank.
- Automatic payments. While lenders like to list debiting directly from your bank account as a positive, if you don’t have the money to pay back your loan, it could lead to overdrawing–that means more fees.
- Disreputable lenders. Although short-term loans can be a good solution to financial emergencies, you should be on the lookout for lenders who don’t adhere to NCA’s regulations. Make sure your provider follows all the rules so you stay safe.
How does repayment work on a 90 day short term loan?
Once you get your funds, you’re on the hook for repayments. Some loans come with monthly repayments while others might come with bimonthly, weekly and even biweekly repayments. Since there’s more than one payment, three-month short-term loans don’t always face the same legal restrictions that you might find with payday loans due within 30 days.
Most lenders allow you to sign up for automatic repayments from your bank account. However, others might accept manual repayments online, in-person repayments at a physical location or wire transfers.
Getting a short-term loan that you can repay in three months can give you enough time to streamline your finances. But taking on a high-rate loan with a longer term can sometimes be more expensive than your traditional payday loan. You can learn more about your short-term loan options by visiting our payday loans guide.
Frequently asked questions
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