There are numerous reasons that can lead to people having bad credit. When this happens, chances are that you are active in the credit market, but due to unforeseen circumstances like losing your job or some financial difficulties and you have not kept you accounts up to date, you end up with bad credit.
Having bad credit can be a stumbling block in a number of ways.
Ways to qualify for loans for bad credit in South Africa:
There are numerous micro lenders offering loans for bad credit in South Africa. Many of these institutions are available online and have simple qualifying criteria.
To qualify for loans for bad credit in South Africa, you generally need to be in permanent employment for at least 6 consecutive months and you need to prove affordability. Lenders want to see that you are in reliable employment and will be able to afford repayments comfortably. In this case, your affordability is more important than your creditworthiness.
You need to have a valid South African ID and an active bank account in your name.
Keep in mind that interest rates charged may be higher. You will be considered a higher risk to lenders.
If you want to improve your chances of getting lower interest rates, the best thing you could do for yourself would be to try to improve your credit standing. Make sure that you repay all your outstanding debts and keep up to date with any current debts you have.
If you have no credit history, getting a loan may also be a challenge at times. This is mainly because lenders have no way of ascertaining what your payment habits are.
Once you are approved for loans for bad credit, make sure that you pay them off on time so you avoid accumulating more bad debt.