Pay day loans

Pay day loans were unknown in South Africa until recently. With payday loans becoming popular in the world, South Africa has also experience a huge demand for payday loans. Although South Africans are used to personal loans with long repayment terms of up to 60 months, recent statistics reveal a large demand for pay day loans. Payday loans are short term loans payable within 30 days and in some instance on your next payday. As the rest of the world experience financial crisis, South Africa, too did not escape the global recession.

Some outside forces such as oil prices, export and imports as well as the ability of the country to borrow money, are some of the external factors which led to inflation in South Africa. The cost of living is sky rocketing, and South Africans are also feeling the pinch. More and more consumers rely heavily on credit to sustain themselves. People are living beyond what their salaries dictates. With the tightening of credit regulations and the coming into operation of the National Credit Act of 2005, more consumers found themselves now been unable to get credit for cars and bond for houses. In the past, credit was assessed on what you earn irrespective of your other financial commitments.

You were given credit on what you earn rather than what you can afford. Fearing closure of business many credit provider in South Africa, on the eve of the National Credit Act, extended credit to consumers in order the avoid the restrictions and cumbersome requirements for the new lending. This gave consumer even more credit that they required or qualified for. Unfortunately with many consumers used to living on credit, they were over indebted. The lending criteria now requires amongst others, that credit be given only when a consumer can afford to service the credit or debt. The credit requirement is now “affordability” rather than what you earn. For example if you earn R50,000 per month but you have many creditor taking you money, you may not qualify for a credit even for a mere R5000.00 as you would not pass the “affordability” test.

In the past credit providers would simply loan you money on the basis of your monthly income. While banks were traditionally lending people money, they only did so in form of personal credit cards and this led to the development of micro lenders to provide credit. People rushed to micro lenders to lend money for long term with repayments terms up to 60 months in some cases. With these people now having taken many long term personal loans, increasing cost of living, they now failed to qualify for these personal loans.

With countries such as United States of America and United Kingdom now moving towards payday loans, South Africans also saw an opportunity in the payday loans lending business. Payday loans are usually taken by people with poor credit record or those who need loans urgently with a view to repay them within a short period of time. The is recently a huge demand for pay day loans in South Africa.

The good thing about payday loans in SA is the fact that lending is strictly controlled, and this means the consumers will pay the maxim interest rate in terms of the National Credit Act. This at least will ensure less interest payable as compare to the period prior the coming into operation of the Act. Payday loans are usually easy and fast to get. The application process is usually online and takes not more than 15 minutes to complete. Once completed, and if approved, you can get money the same day and as early as within 1 hour of your application.

Payday Loans Instant cash relief



Get a Free callback Now!

We would love to hear from you! Just fill in the form below and we’ll try to get back to you as soon as possible.