Representative example: Estimated repayments of a loan of r30,000 over 36 months at a maximum interest rate of 29.25% apr would be r1,381 per month including fees. Repayment terms can range from 2 - 72 months. Myloan is an online loan broker and not a lender. Our service is free, and we only work with NCR-licensed lenders in South Africa. Interest rates charged by lenders can start as low as 19.25% apr, including an initiation and service fee determined by the lender. The interest rate offered depends on the applicant's credit score and other factors at the lender's discretion.
The maximum annual interest rate including fees is 27.5%. Repayment terms can range from 1 - 72 months.
MyLoan is an online loan broker and not a lender. Our service is free and we work with NCR licensed lenders in South Africa. Interest rates charged by lenders can start as low as 20% APR, including an initiation and service fee determined by the lender. The interest rate offered depends on the applicants’ credit score and other factors at the lenders’ discretion.
What is Considered an Installment Loan?
An installment loan allows borrowers to receive a specific amount of money from a lender and repay it in equal monthly installments over a predetermined period. Depending on the terms and conditions, these loans are typically repaid over a few months or even years. Installment loans in South Africa are quoted by financial institutions, including banks, credit unions, and online loan facilitators like MyLoan.
Three Examples of the Most Common Type of Installment Loans
It’s important to note that these are just a few examples of installment loans, and other types may be available based on specific needs and circumstances.
Personal Installment Loans:
Personal installment loans are a popular form of borrowing that can be used for various purposes, such as consolidating debt, funding home improvements, or covering unexpected expenses. These personal loans typically quote fixed interest rates and repayment terms ranging from a few months to several years, allowing borrowers to repay the loan in equal installments. Find a personal loan in Tshwane here.
Car Loans:
Car loans are installment loans specifically designed to finance a vehicle purchase. Borrowers can secure an car loan from a bank and repay the loan over a set period. The loan amount is often based on the vehicle’s value and the borrower’s creditworthiness, and the installment payments are spread out over the loan term.
Mortgage Loans:
Mortgage loans (also known as bonds) are long term installment loans used to finance the purchase of a home or property. These loans typically have longer repayment terms, commonly spanning 5 to 15 years. Borrowers make regular monthly payments of principal and interest, allowing them to gradually repay the loan over time while building equity in their property.
Advantages and Disadvantages of Installment Loans
Advantages of Installment Loans:
Predictable monthly payments
Longer repayment terms for greater flexibility
Opportunity to build a positive credit history
More significant loan amounts are available
The structured repayment plan for easier budgeting
Disadvantages of Installment Loans:
Accumulation of interest charges over the loan term
Potential fees, such as origination fees or prepayment penalties
Defaulting on payments can lead to negative consequences
May end up paying more in total compared to the original loan amount
Stricter eligibility criteria for unsecured installment loans
Frequently Asked Questions (FAQS) about Installment Loans
What is the Difference Between a Loan and an Installment Loan?
While both are borrowing forms, the repayment structure is the main difference. A regular loan often refers to a lump sum borrowed, typically repaid in fixed installments over a shorter period. On the other hand, an installment loan allows borrowers to receive a specific amount and repay it in equal monthly installments over a predetermined period, usually with a fixed interest rate.
What is a Personal Installment Loan?
A personal installment loan is a type of installment loan that is not specific to a particular purchase or purpose. It provides borrowers with a lump sum, which is then repaid in fixed monthly installments over a set period. Personal installment loans can be used for various purposes, such as debt consolidation, home improvements, or unexpected expenses.
What are the Interest Rates on Installment Loans?
The interest rates on installment loans vary from lender to lender and depend on factors such as the loan amount, repayment term, and creditworthiness. Interest rates can be fixed or variable, and it’s essential to compare rates from different lenders to find the most favourable terms. Always carefully review the interest rate and associated fees before committing to an installment loan.
Is an Installment Loan Secured or Unsecured?
Installment loans can be either secured or unsecured. A secured installment loan requires collateral, such as a vehicle or property, which serves as security for the loan. On the other hand, unsecured installment loans do not require collateral but may have stricter eligibility criteria and higher interest rates due to the higher risk for the lender.
What is the Easiest Installment Loan to Get Approved For?
The ease of approval for an installment loan depends on various factors, including the lender’s policies, credit history, and financial situation. Generally, secured installment loans may be easier to get approved for since they provide collateral for the lender. However, some lenders specialise in quoting installment loans with more flexible eligibility requirements, making them relatively easier to obtain for individuals with lower credit scores.
Do Installment Loans Require a Credit Check?
Lenders usually perform a credit check when evaluating an installment loan application. The credit check helps lenders assess the borrower’s creditworthiness and determine the interest rate and terms of the loan. However, specific lenders may quote installment loans specifically designed for individuals with limited or poor credit history, and they may have alternative criteria for evaluating loan applications.
How do I apply for an Installment Loan?
You can apply for an installment loan by completing our short loan application. Most of our partners have the following requirements:
Age above 18 years
Valid South African ID document or Social Security number
Up to 3 months’ recent bank statement
1 months payslip - a regular source of income/employment
Proof of residence not older than 3 months
It’s important to note that meeting these eligibility criteria does not guarantee loan approval, as each lender has its assessment process and specific requirements. Researching and comparing multiple lenders is advisable to find one that aligns with your financial situation and eligibility criteria.