What is my credit score?
Your credit score will affect your ability to get access to credit. If your score is low, you should consider raising it before applying. Your credit score is an indicator of how well you’ve managed your other debts. A good credit score generally leads to favourable loan terms. In South Africa, all credit-active citizens are entitled to one free credit report a year. Once you have identified that you need a loan, make sure that you contact any of the credit bureaus to get a comprehensive credit report.
Is this a secured loan?
Some loans require some form of collateral. Secured loans are such loans. They also generally come with lower interest rates because the collateral is used to offset the risk.
What is the application process?
You need to find out what you need for approval as well as how long it will take for you to know the outcome of your application. These days you have the option of applying online for a loan. Some lenders still prefer in-branch visits for loan applications.
What are the requirements?
You’ll need to state your income or provide proof of income. Find out about the age requirements as well what form of ID you’ll need to provide. There may be additional documents that are required. Find out what the qualifying criteria are before you apply.
Is there a penalty for pre-payment?
If you need a loan in South Africa, keep in mind that some lenders charge you extra if you repay your loan early.
What is the repayment period?
A shorter repayment period generally means that you will have higher monthly payments. A longer repayment period means that you will have lower payments but a higher loan cost overall.