Short-term loans are an attractive financing solution when dealing with sudden expenses. With so many short-term loan providers out there, how can you know you're making the right choice?
To make sure you choose the right short-term financing option, you'll need to consider a few things, such as:
The most important thing to check before taking out a loan is the reputation of your provider. To operate within the law, a loan provider must be authorised by an official authority, such as a financial regulator.
A financial regulator is an institution that ensures any financial activity is compliant with the law. These regulations help protect customers from potential scams and hidden costs, as well as keep the financial industry stable.
In South Africa, you should make sure your personal loan provider is approved by the National Credit Regulator.
Some personal loan lenders will require more comprehensive loan applications than others. A typical short-term loan application will involve providing documents such as traditional bank statements to confirm your monthly income. The loan providers might also do a thorough background check to assess any existing debt or bad credit score.
Based on these checks, some lenders might reject your application. On the other hand, some secured loans providers will offer their services even to those with bad credit scores.
When you borrow money from a loan provider, you are expected to pay back the same amount plus additional costs. Part of the additional costs is the interest. Ideally, you should always know what the interest rate for a specific loan is before you apply.
The average interest rate is usually expressed as a percentage and is calculated as follows:
Each lender will have their own competitive interest rates - usually, lower numbers reflect more affordable loans.
If you don't want to waste your time doing the maths, don't worry - Southern Finance does it for you. Simply use our homepage slider to select the amount you wish to borrow, and we'll let you know straight away how much you need to repay.
On top of interest rates, you will also need to pay extra service fees when lending money. Once again, these fees are different from one loan provider to another.
You should always make sure to choose a loan provider with repayment rates that you can afford.
Some companies will offer special loan terms and conditions, designed to make borrowing money more flexible. For example, you might be able to choose between a longer or shorter repayment period, or even change your repayment date in cases when your circumstances change. Not only that, but some loan providers allow several monthly payments instead of a lump-sum payment.
Some loan providers might even allow you to extend your repayment period if you can't afford to pay right away, as long as you make sure to communicate regularly and let them know your situation. Flexible loan options should always be your number one choice.
If you find yourself needing extra help with unexpected finances, we've prepared a list of steps you can follow to ensure you make informed decisions for yourself.
A traditional loan is definitely a viable option but it is not the only one. First, consider if there is any way to increase your income quickly, by taking on extra hours at work, selling unused personal items, or borrowing from friends and family.
If you're planning to get a payday loan, you should know ahead of time how much money you need and how much money you can afford to repay in an estimated timeframe.
As we've mentioned above, different loan providers will offer different interest rates, service fees, and repayment terms and conditions. Compare each option carefully so you can make the best decision for you or your family!
When it comes to financial matters, you can't take your decisions lightly as they can have a great effect on your life. Taking your time to weigh your short-term loan options will make a world's difference, helping you:
Southern Finance is your reliable short-term loan provider, dedicated to helping hard-working adults like you reach financial freedom in no time. In need of a short-term loan with no hidden fees? With our quick approval process, you can access the help you need right away. Use our slider to calculate the loan amounts and costs and apply today!