Unsecured Personal Loans - The Definitive Guide
An unsecured loan is a type of personal loans that does not required any collateral or security.
Unsecured Loans are popular in South Africa and considered the best option for individuals who are looking to build credit profiles.
Credit providers lend you money based on your affordability.
If you have a stable income and seems responsible, you'll have a good chance of getting unsecured debt in South Africa.
We're going to have a look at what's needed to qualify and the advantages of taking the loan.
Unsecured loans for borrowers in South Africa
With unsecured credit, you don't have to place your property or asset at risk for securing the loan.
Credit providers take all the risks, so you don't have to.
They hope and trust you will pay back the loan in time.
But there's a catch.
Lenders will put higher interest rate to compensate the loan. They would want to recover the money as soon as possible.
And the best part is that you get to choose your own flexible repayment terms.
Blacklisted people can still qualify for the loan. It's all up to the decision by the lender.
Applying for unsecured loans is more quicker to process than secured loans.
If you need urgent cash, you're more likely to get unsecured credit as compared to secured loan.
The loan is aimed to cover emergency expenses such as medical bills, fixing your car, settle your property to rent it out, and so on.
You can't finance a large expense like buying a new car with unsecured loans because it gets crazy with interest rates.
Other lenders offer free loan calculators to help individuals like you estimate monthly repayments for unsecured loans.
These online calculators are very useful, you'll be able to plan your budget ahead of making your applications.
From there, you can begin your application online. A few clicks and your application is being attended to by a consultant.
Unsecured loan qualification criteria
With any kind of loan, lenders need basic documentation to understand your credit background.
They don't want recklessly give money to an irresponsible consumer.
In most cases, credit providers will need the following:
- Copy of your Identification Book or Smart ID
- Proof of income - recent payslips
- Bank account in your name - recent banking statement
- Proof of residential address
Depending on the lender, they might require more documents in order to approve your unsecured loan.