Short-term loans have gained tremendous popularity in SA over the past few years. These loans are done entirely online and are generally for loan amounts up to R4,000 for first time applicants and R8,000 if you have taken a short-term loan out before with the same loan provider. The repayment period varies by loan provider but generally is less than 45 days (Please note that your repayment date can’t fall on a Sunday). Below is the first short-term loan comparison tool in SA! Simply move the sliders to find the amount you are looking to borrow as well as when you would like to pay it back and the exact amounts will be shown in the table below. Then click ‘Apply now’ to get started!
R max amount R4000
Days max 45 days
|Loan Provider||INTEREST & FEES||RE-payment date||RE-Payment AMOUNT|
Please note the general qualifying criteria for each of these payday loans:
-You need to be at least 18 years old,
-Have a valid SA ID book,
-Be permanently employed and receive a regular income,
-Have an active bank account into which your salary is paid into,
-Have an active cellphone number,
-Valid email address
-Clean credit record.
If the loan provider you are looking for is not visible in the table above, it is because the loan amount or repayment period is not possible with them. Below is a general breakdown of the loans available from each provider.
|Loan Provider||Amounts Available||Repayment Period Available|
|Wonga||R100 – R2,500||1 days - 30 days (this can extend up to 45 days if you apply from the middle of the month)|
|Boodle||R100 – R2,500||1 days – 32 days|
|WannaLoan||R500 – R3,000||5 days – 37 days|
|GetBucks||R500 – R4,000||7 days – 45 Days|
A brief introduction about each of the payday loan providers listed above:
The payday loan providers shown below have the majority market share in SA in terms of the online, payday loan market. They each have their own unique, user friendly, easy to navigate system and application process that is streamlined to save you time and help you get the loan you are looking for paid directly into your bank account as soon as possible. Below gives some general information about each of these companies...
Boodle.co.za - Boodle was the first payday loan provider in SA. They offer loans from R100 – R2500 with repayment periods of up to 32 days. The application process can be done in any of the 9 official SA languages so they really do cater for everyone!
Getbucks.com - Getbucks has been expanding aggressively into Africa and currently have a presence in Botswana, Kenya, Malawi, Zimbabwe and SA. Overseas they also operate in Austria and Spain. Here in SA, their offering is slightly different from the other payday loan providers in that they allow first time applicants the ability to apply for loans up to R4,000 with repayment periods up to 45 days.
Wannaloan.co.za – Wannaloan? is the newest of these four platforms to enter the payday loan market in SA. The idea behind this company began in 2010 and towards the end of 2012, the platform entered the market. They have built up a solid reputation in the industry and are based in Cape Town.
Wonga.co.za – Initially launched in the UK in 2006, Wonga was the first loan provider to fully automate the online loan application process, making it entirely paperless. Since the launch of Wonga, the company gained massive popularity and has since achieved a dominant market position in SA. Wonga is also currently operating in Ireland and Canada as well as the UK. They are the only payday loan provider that has successfully granted over 7 million loans to date (1 million of those being from SA)! They also use a very unique (and secretive) application process and are therefore very selective about who they grant loans to. Please note that when applying for a loan near the end of the month (from the 20th onwards, loans up to 45 days become available). Wonga has recently launched a brilliant charity initiative (together with the non profit organisation; Grandmothers Against Poverty & Aids: GAPA) in SA whereby they are knitting warm items of clothing that will be handed out in underprivileged communities around the country. If anyone would like to get involved with this initiative and donate blankets, scarves and beanies, Wonga will then distribute these. These can be dropped off at the Kaya FM offices in Johannesburg and the Heart 104.9FM offices in Cape Town throughout the month of June.
Payday loan facts:
A payday loan is an unsecured loan that typically needs to be repaid within a month or 45 days maximum (preferably on the day your next salary date is).
These short term loans are meant for emergencies when you urgently need access to funds up to R8,000, however for first time applicants the loan amounts will vary for each loan provider. Examples of these emergencies are; urgent payment of school fees required to secure your child’s place in school, medical emergencies, having dreaded car trouble where your car needs urgent fixing or any other situation that may arise where you require urgent access to funds (buying those designer clothes you have had your eye on should not constitute an emergency). These loans should be used as a last resort though as the fees and interest attached to each loan can affect your ability to successfully repay the loan you have taken out on time. If you need access to funds for a short period of time, you should rather try to get these funds from your overdraft or credit card, but if you don’t have access to either of these, a payday loan might be your most practical solution.
Fortunately though, these payday loan providers have sophisticated application requirements that allow them to be very selective about who can be granted a loan and therefore will only grant you the loan if they know you can afford to pay it back and in a timely fashion.
To give you a rough idea of how big the short-term / payday loan market is in SA, for the first 3 months of 2013 there was R1,59 Billion worth of these payday loans that had been taken out by individuals.
Although there have always been a lot of mixed feelings about the payday loans/ short term loan industry, especially abroad in countries like the USA and UK, one beneficial fact about these loans cannot be denied... These Loans provide a source of financing for people that are cash strapped and are in desperate need of urgent money. These loans are also in the majority of cases only given to people that can and will pay them back and those that don’t are the exception rather than the norm.
Another interesting fact about payday/short term loans is that when natural disasters occur, countries that have access to these loans help those people that have been affected by the disaster as they have an instant source of money to buy food, water, clothing and shelter while the area is affected.
Some other common names for Payday loans are; short term loans, instant loans, fast loans, emergency loans, salary advance loans, quick loans, cash loans and online loans.
These loans are and continue to be a very viable and popular form of financing as opposed to the traditional form of bank financing. This is due mainly to their brilliant flexibility to select the amount and repayment period of the loan that suits you the best and the fact that the entire application process is paperless and can be done entirely in the comfort of your own home.
The importance of comparing payday (short term) loans:
For the first time in SA, comparing payday loans on one platform is now possible. This can not only save you time, but can also show you that no matter what amount of money and time period you want to borrow the money for, it will display in order from cheapest to most expensive, so that you can find the most affordable loan for you.
Comparing of financial products and services online such as loans has grown in popularity in recent years in developed countries such as Australia, UK and the USA but is also starting to gain traction in SA. Payday loans however have mostly been ignored with this type of online comparison and that is why we have taken the steps to finally have this comparison tool available to you, so that you are as informed as possible with all the options, enabling you to confidently choose the payday loan that you feel is right for you.
An important fact to note that when applying for any type of loan, especially for payday loans, you should only apply to one and let us explain why... Each time you submit an application for a payday loan, the loan provider will submit your details to a credit bureau to have a look at your record rating (there are many more factors that go into the decision of granting you a loan or not but this is a large part of the decision) and as soon as the company has pulled your credit record they leave a mark on your credit record that shows any provider in the future that they had a look at your record because you were looking for a loan. This is not a bad thing but this is where the issue can come in...
If for example you apply for a payday loan from Boodle, GetBucks, Wannaloan and Wonga, in that order, by the time Wonga views your application they can see that you have just applied at 3 other loan providers looking for a loan and what that says to them is that you are just trying to recklessly take as many loans as you can, without having the intention to pay them back.
The big advantage of our new payday loan comparison platform is that now, instead of having to individually shop around for the best rate, you can quickly and efficiently see the best rate for you based on the loan you want and then only apply to that loan provider which will be much healthier for your credit score, instead of applying to numerous payday loan providers which will always be a red flag to them and most loan providers in the future.
How the NCR regulates Payday Loan providers:
Payday loan providers in SA are strictly monitored by the National Credit Regulator (NCR). They fall under chapter 5 of the National Credit Act which applies to all loan providers that do not lend out more than R8,000 per loan and for all periods under 6 months. These loan providers, just like all other credit and loan providers in our country have a set amount they are allowed to charge on a loan in terms of the Interest rate, monthly administration fee as well as the initiation fee for granting the loans. The maximum fees they are allowed to charge are as follows:
Interest rate- The maximum interest allowed to be charged on payday loans is 60% per year, which works out to 5% per month or around 0,17% per day. This is interest is simple interest calculated by the daily rate (it does not compound so every day the loan is active you will be charged roughly 0,17% of the loan amount). Although this annual rate may seem very high, the majority of these payday loans are only taken out for a month or less so in most cases the total interest paid on them is in the region of 5% or less.
Initiation fee- This is a once off fee that is charged after the loan has been successfully granted and you have taken the loan. For payday loan providers the maximum amount that can be charged is R150 + VAT (14%) for the first R1,000 and then an additional R100 + VAT for every R1,000 after. So for example if you were to borrow R2,500, the initiation fee could be up to R150 + VAT + R150 + VAT= R342.
Monthly fee- This is a monthly service fee that is added to the total repayment of the loan. The maximum amount that can be charged here is R50 + VAT = R57. Some providers will charge an additional monthly service fee if the loan extends past 30 days while others do not. This is something to keep an eye out for if you choose a payday loan longer than 30 days.
It is very important to be aware that short-term loans/instant loans/payday loans must be repaid on time, on the date initially agreed upon (or sooner) else additional penalty or legal fees could be imposed, as well as seriously damaging your credit rating which will make it extremely difficult to acquire any further loan funding in the future. By successfully repaying your loan on time this reflects very positively on your credit record and can prove to be beneficial when next you are applying for any form of financing.
Utilizing a Payday Loan effectively:
We live in a time in which living expenses are constantly rising, transportation has become a luxury as opposed to commodity, rising food prices constantly make our personal consumer baskets smaller, containing less of the products we want and more of what we truly need.
In essence, our lifestyles are either downgraded dramatically or we finance them with debt. If you are an individual unwilling to pass up on your Sunday cruises to the dam or “Thursday sushi evenings” just because of rising prices, chances are you belong to group of consumers who have made debt a part of their daily lives.
There are two mainstream options available to you when it comes to financing your lifestyle, namely personal loans and Payday loans of which we will be focusing on the latter in this article.
A Payday loan is one which generally consists of a much smaller amount than a personal loan for a much shorter period of time, ranging from R1 to R4000 with a repayment term of not longer than 45 days.
Many believe that a payday loan should be used to supplement your lifestyle expenses in order to increase your disposable income when in fact a it can be an incredibly helpful product when used correctly.
It should in fact simply be used to narrow the gap between cash inflows and outflows so let us explain with a few examples below:
If you have a debit order which will be going off on the 23rd of this month but you have run out of money due to unforeseen circumstances and you are only getting paid on the 30th, you could take out a loan on the 23rd and set the repayment period as 7 days so that on the day your salary is paid, the loan repayment will simply be debited from your bank account.
Another practical example may be if an appliance breaks in your house a few weeks from payday (a fridge for example) and its impractical to not get it fixed, taking out a loan for this type of emergency may be just what is needed to help you out.
In conclusion, payday loans have taken up an important role in South Africa’s lending environment, providing a much needed alternative to consumers with regards to lifestyle financing opportunities and we foresee that this will continue to be the case into the foreseeable future. With companies such as Wonga.com having firmly established themselves in this market and new competitors like wannaloan.co.za and getbucks.co.za starting to get a foothold, one can expect an even wider variety of short term loans to select from.