The explosion in unsecured lending was triggered when the cap on interest rates was done away with in 2007 and the subsequent removal for market share bringing about some dangerous practices and a feeling of angst among lenders on the whole. But even in this clime lenders are offering individuals personal loans.
Capitec bank the new lender on the block and a great bank
RCS Loans is now one of South Africa’s leading personal loans companies. A massive player in the personal loans space, they now have some great deals.
Direct Axis personal loans division is probably the most sorted micro lender in South Africa, leading the way in terms of micro lending and loans package offerings to South Africans..
African Bank is the largest lender in South Africa for personal loans.
Personal loans from FNB are created and designed to assist the client to improve their lot in life.
The ABSA Personal Loans process is hassle-free, and you can apply for a loan online.
A Nedbank personal loan has been specifically designed to remove immediate financial pressure should you find you are in a tight monetary spot or two.
Standard Bank has its footprint in seventeen African countries and twenty one locations spread across the globe.
They’re not a bank. They’re privately owned and their lending practices are a lot less strict than most of the banks, which makes these guys a great option for personal loans.
Personal loans, a touchy subject
As much as financial advisors and financial Guru’s such as Suze Orman are not ones for personal loans and loan sharks, there’s no denying that once you’re in financial dwang, that you’re going to end up using one.
I also plan on writing a couple of articles about those micro lenders that are ripping people off so that you know what to look out for and who not to use. As you may or may not have read in recent news, was the stories or Rudco and Silvertale Investments. Thanks to the public making such a big fuss, it looks like we may have managed to eliminate some of them “perceived” BAD APPLES!
There are a couple of reasons why lenders have been making larger and longer personal loans, though and these are mostly related to regulation and the basic economics of the business of lending and borrowing.
Reasons for larger and longer personal loans since 2007:
- On the regulations front the main driver has been the replacement of the Usury Act by the National Credit Acts in 2007 which did away with the previous rules that capped interest rates on loans in excess of R10 000 and 36 month terms.
- Growth since 2007 has automatically been in the area outside this zone where almost all the unsecured lending was previously not allowed.
- Issuing a one year loan five times is a far more costly option than give out a single five-year personal loan.
- The risk is also a lot higher – in other words over five years the chances of something untoward happening such as retrenchment or unemployment are often quite likely to occur.
- A trade-off of lower cost for higher risk has been favourable for longer term loans especially when lenders have built stronger databases regarding credit scores and credit histories of individuals wanting to borrow money.
- A further factor that has played a role is the growth of personal loans has been for consolidating debts; taking out a single larger personal loan to settle debts is common practice amongst borrowers.
Lenders are well aware that there will always be a certain percentage of write-offs by the consolidator. Most of the existing operators for consolidated loans have shifted from loans that are short-term to longer-term and larger amounts.
Even if lenders are tightening their lending, there is still scope to secure a personal loan if you need the money. Change your life today and get the cash you want for the things you need; whether this is a short-term personal loan or a longer-term loan for a larger amount – we offer you a hands-on guide to personal loan options from all the major players.