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Online payday loans
Comparing payday loans online can save time and effort when you need it most.
The number of payday lenders offering online payday loans in South Africa seems to be on the increase. Applications made online can take just a few minutes to complete, and there’s no need for face-to-face meetings at a bank or with a broker. If you’re approved, you could receive the funds on the same day.
Although this sounds very convenient, applicants should fully understand the fees, risks and eligibility requirements involved before making an application. Let’s take a look in more detail.
What is an online payday loan?
An online payday loan is a short-term loan that’s paperwork-free and is usually for smaller amounts. Once the lender deposits the funds, the borrower must pay it off in full by the end of the loan term. The customer usually must make regular repayments according to the frequency of their pay (for example, fortnightly) and depending on the loan, the term may be as short as one or two weeks.
Compare payday loan options in South Africa
What to compare before applying for an online payday loan in South Africa
- Loan amount. The more you borrow, the larger the repayment amounts and fees will be so it’s important not to borrow more than you need and can afford to repay.
- Loan term. It’s important to choose a loan term that offers enough time to repay it in full.
- Repayments. Payday loans usually require borrowers to make regular repayments that line up with their pay frequency. The repayments will be outlined in the contract before the loan is processed, so it’s important to pay attention to these and ensure that you can afford them before signing anything.
- Fees. Lenders charge a one-off establishment fee as well as monthly fees. However, do take note of hidden costs like late payment or default fees.
- Security of lender. Before applying with an online lender, make sure that it’s a responsible and reputable credit lender. Check that the lender has a credit licence, read reviews online and try to get in touch with the customer service and ask a few questions to see if they’re helpful, transparent and easy to contact. Also, check to see if they’re part of the National Credit Regulator (NCR) network in South Africa.
Pros and cons of online payday loans
- Turnaround time. Online payday lenders often have your loan to you within one business day, with some even able to send your money in as little as 30 minutes. This factor will be important if you’re trying to secure urgent financing.
- Easy to compare payday loan options. With a range of online lenders at your fingertips, comparing your options is easy. Look at the features on offer from different lenders and apply for the one that best suits your needs. If you’ve compared your options and you meet the eligibility criteria, start your application by clicking “Go to site” in the table above.
- Quick and simple application. You can complete your request for a payday loan online in a matter of minutes and receive instant approval.
- Disreputable lenders. Some dishonest lenders are operating in the online space, so you need to be careful when comparing and applying for loans. A reputable lender will never charge an upfront fee (or ‘advance fees’) to process a loan application. Watch out for high ‘service charges’ or any payments that don’t outline the reasons for payment.
- Higher fees. Payday loans come with much higher costs than a regular personal loan. It’s vital to decide whether you really need a loan before applying.
- The payday loan spiral. Online payday loans are intended to cover one-off financial emergencies, like dental bills or the cost of fixing or replacing a broken appliance or faulty car. Unfortunately, these loans are so simple to apply and receive approval for that people get caught in a cycle of taking out payday loans regularly or using funds from a payday loan to service other debt. Be honest with yourself about the reason for the loan before you apply.
Who can apply for online payday loans?
Payday loans aren’t just popular for their convenience, but for their flexible lending criteria. These loans are small and designed to repay easily when the borrower receives their next pay cheque. For lenders, this makes these loans less of a risk than longer-term loans.
Because of this, people who have bad credit can still receive a payday loan. The lenders need only be satisfied that you can repay the loan amount when you receive your next pay cheque, rather than you being able to afford ongoing loan repayments over the coming months or years.
How to apply for an online payday loan in South Africa
Once you’ve compared your options, confirmed that you can afford the repayments and fees, you can consider applying for a loan online directly via a provider’s website. Before you start the application, check if you meet the eligibility criteria to complete the application. The specific requirements will vary between loans, but typically includes:
- Income. Applicants must receive an income. The specific threshold will be specified by the relevant provider.
- Credit history. Some online lenders will accept applicants with bad credit, but applicants must still meet the other criteria and demonstrate their ability to repay the loan.
- Residential. Most lenders will only accept online applications from South African citizens or permanent residents.
- Age. You must generally be 18 years or older to apply.
As payday loans are an expensive form of credit, you shouldn’t apply for one unless you’ve compared your options and are sure that you can afford to make the regular repayments for the length of the loan term. Our guide to payday loans has answers to some of the commonly asked questions with this type of lending.Back to top
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