Compare Payday Loans Online In South Africa

Are you looking for payday loan in South Africa? Let’s compare online and easily with

Sandra Ti
Finance Journalist
Published: May 28, 2024

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What is a payday loan? 

A payday loan is a type of short-term loan, sometimes called a payday advance, salary loan, or small amount loan. The name ‘Payday Loan’ is thought to be because such loans heavily depend upon the borrower’s next payday or salary. Generally, people apply for payday loans when they can’t manage their budget or face a sudden cash shortage.

At RandHub, we help South Africans who are financially struggling and cannot afford bills or unexpected emergencies. Whether you need to access payday loans online, a cash loan, or emergency money, RandHub can provide you with a short-term payday loan or cash solution in minutes. Compare, apply, and save now with us. South African payday loans range between R100 and R5,000.

How do payday loans exactly work in South Africa?

As discussed above, payday loans are named because they depend on the borrower’s future paycheck or following payday. When a borrower applies for a payday loan, they will write a postdated check to the payday lender or give them electronic access to their bank account to get loan repayments on the agreed date. Usually, you have between 30 days and 12 months to repay it, although the longer you take, the higher the interest rate and fees you’ll pay.

In South Africa, payday loans are available through online lenders and physical storefront locations. This type of loan is unsecured, meaning you don’t need to submit any collateral against your loan since the loan agreement is based on your next paycheck, eligibility requirements, and ability to loan affordability.

Payday loans are offered at high interest rates and fees, but some lenders may also have affordable options. The best practice is to compare payday loans online in South Africa with RandHub before applying for a suitable deal.

How to compare South African payday loans online?

RandHub is a modern approach to compare lenders from across South Africa online, which helps you to find the most suitable options. If you make up your mind to take out a payday loan online, here are some proven points to keep in mind:

  • Monthly fee: Payday loans cannot charge annual interest rates; instead, they charge monthly fees. According to National Credit Act, the interest rates for payday loans in South Africa are around 5%, with additional fees. That is why a payday loan is an expensive way of borrowing money.
  • Administration fee: It is also known as the upfront fee, which you are paid once your loan is approved. Compared to other credit options, payday loans often have very high administration fees. However, many lenders who offer payday loans with no upfront fee.
  • Late payment fee: Payday Lenders impose sky-high finance charges when you fail to make your loan payment on time. These late fees quickly add to your balance, making the loan amount much higher than you originally owed.
  • Loan term: Typically, payday loans are offered for 16 days to 12 months. However, you can repay your loan earlier to save money on the additional fees. It is essential to check whether your payday lender charges an early repayment fee.

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What features makes payday loan best option for you?

  • Quick application: Payday loans offer a swift and concise application process, providing a source of fast cash that can be a lifeline during financial difficulties.
  • Efficient fund transfer:In contrast to conventional bank loans, payday loans ensure that funds are deposited into the borrower’s account within a matter of minutes after approval.
  • Accessible to all: Payday loans are a popular choice, particularly for those with poor credit histories. Unlike traditional lenders, payday lenders prioritize your ability to repay, making them a viable option for individuals with less-than-perfect credit scores.

What are the risks of payday loans?

  • High interest rates: High interest rates: Payday loans are offered at very high interest rates compared to other loans. Because such loans are typically repaid within a shorter period of time, payday lenders may charge high rates to compensate for the perceived risk.
  • Risk of debt cycle: Another risk with payday loans is getting stuck in a debt cycle. If your income is limited and you can’t afford the loan repayments, this can lead to a cycle of debt that can be hard to break.
  • Impact on your credit score: Failing to repay your loan on an agreed-upon time can negatively impact your credit score, as well as your future borrowing.

Why do you need to compare payday loan offers?

By comparing payday loan offers, it becomes easy for you to decide which is suitable for you and matched with your current situation. Before applying for a payday loan in South Africa, you should be responsible because of its high interest rates. Additionally, ensure that you can meet your loan repayments without any problem.

Payday loans can be costly, so it’s essential to compare options to find an affordable lender and offer thoroughly. Without comparing payday loans, finding the best solution can be difficult, and you might end up with a deal that costs more than necessary. In order to avoid future financial difficulties, comparing loans is crucial.

How to apply for a payday loan in South Africa?

Most of the South African payday loan lenders let you apply online. You need to meet some specific eligibility requirements to get approval. The eligibility criteria depend upon your lender and may be different, but the application process is almost similar as follows:

Step 1: Compare lenders

While payday loans can be costly, some lenders offer them at more affordable rates. The best way to find the best deal is to compare lenders. Check the loan’s cost, see if additional fees or late payments are charged, and also check the repayment structure.

Step 2: Review eligibility requirements

Before apply, ensure you’re eligible for the loan and afford the repayments on time. Being rejected too much can lower your credit score, which make it difficult to apply for future loans.

Step 3: Approval and review

Typically, payday lenders decide on your loan application within a few minutes. If approved, you will receive a loan contract. It’s important to carefully review the contract’s loan costs, interest rates, and repayment terms. Once you sign the contract, the money will be directly deposited into your bank account.

How to check eligibility for payday loans?

To see if you are eligible for an instant payday loan in South Africa or not, consider the following common vital factors:

  • Your age should be at least 18 years or above.
  • You must be a citizen or permanent resident of South Africa.
  • Most of the payday loan lenders require stable employment and income.
  • You’ll need an active bank account to get the loan amount.
  • Must have the ability to make loan repayments on time.

Top 10 reasons why you were rejected for a payday loan in South Africa

Have you ever been rejected for a payday loan? It can be challenging to understand why you were rejected. To assist you, we have listed below some common reasons that could lead to a payday loan rejection:

  1. You are currently unemployed.
  2. Your income is insufficient to make repayments.
  3. You have too many existing debts.
  4. You have too many missed payments on your bills.
  5. You make too many payments to gambling sites.
  6. You can’t able to meet with lender’s set eligibility requirements.

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Frequently Asked Questions About Payday Loans South Africa

Is there such a thing as 100% guaranteed approval payday loan?

There is no such thing as guaranteed payday loans in South Africa. Every lender should follow the regulations set by the NCR. However, there are lenders who offer high-acceptance payday loans.

Can I get payday loan with no credit check?

Some South African payday lenders may offer a payday loan with no credit check. However, you may also pay very high interest rates and additional fees. So, ensure you have enough income to afford them; otherwise, it could lead to debt scale.

Can I get a payday loan with bad credit?

Absolutely yes. You can apply for a payday loan with bad credit in South Africa. Typically, payday lenders focus more on borrower’s ability to repay the loan on time, rather than their past credit history.

Do payday loans hurt your credit?

Payday loans only negatively affect your credit score when you make late payments or default. If you repay it on time, it could boost your credit rating.

Are payday loans legal in South Africa?

Yes, payday loans are legal in South Africa. The lender needs to be regulated and registered by the National Credit Regulator (NCR).

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