How much does it cost to take out a short term loan online in South Africa
40% of South African households cannot afford a shock spending of R10,000 or more, according to a new study published by Old Mutual.
This has increasingly pushed South Africans to friends, savings and, to a lesser extent, stokvels to make ends meet.
Above the R5,000 mark, however, research notes that formal loans are increasingly starting to gain ground, despite a decline in reliance on personal loans for amounts of R10,000 and above.
Currently, one of the easiest ways to access short term loans in South Africa is to turn to an online short term loan provider.
BusinessTech took a look at some of South Africa’s biggest and most popular online loan providers and how they stack up.
How it works
To qualify for a short term loan online, you need the following:
- A South African citizenship with a valid ID
- Be 18 years old
- A valid bank account
- A valid mobile number
- 3 months proof of income
Refundable interest and payment dates can vary significantly depending on the amount requested.
This information is usually available to users in the form of sliders that show how the amounts change based on various factors.
Specifically, BusinessTech reviewed loans of R3,000 – usually the upper limit offered by the majority of these sites – with a 30-day repayment period.
Several sites also allow lenders to request larger sums of money based on their history of using the site.
The following is intended to serve as an informative comparison, meaning that the prices shown may change based on a number of factors.
- Wonga charges R 587.60 in interest and fees for R 3,000 over 30 days.
- This equates to an interest rate of 19.6%.
- Total refund: R 3,587.60
- Wannaloan charges R609.50 in interest and fees for R3,000 over 30 days.
- This equates to an interest rate of 20.3%.
- Total refund: R3,609.50
- Boodle charges R652.97 in interest and fees for R3000 over 30 days.
- This equates to a monthly interest rate of 21.8%
- Total refund: R3,652.97
- GetBucks charges R682.97 in interest and fees for R3,000 over 30 days.
- This equates to a monthly interest rate of 22.8%
- Total refund: R3,682.97
- Mulah charges R602.67 in interest and fees for R3000 over 30 days.
- This equates to a monthly interest rate of 20.1%
- Total refund: R3.602.68
Read: What’s your financial breaking point – How many South Africans can afford a Rand 50,000 emergency in 2017