Mashonisa Loans

Learn about Mashonisa loans in South Africa, including what they are, why people take them, and why they often cost more than regular loans.
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There may be times when you need a loan and a Mashonisa loan might appear to be your sole option. However, in many cases, the situation arises because you don't have enough time to reach out to all the lenders accessible to you. This is precisely where MyLoan can offer assistance.

Representative example: a R50 000 loan at an interest rate of 24.5% per annum plus a once-off initiation fee of R1 207.50 (added to the loan amount in this example) and a monthly admin fee of R69.00, over 72 months would have a total cost of R 103 155.57.

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 Are Mashonisa Loans?

Mashonisa is a South African term used to describe an informal money lender, often operating in disadvantaged communities. A mashonisa loan is a loan provided by such a lender, which is typically unregulated and not subject to the same laws and regulations as formal financial institutions.

Mashonisa loans are often characterized by high interest rates and short repayment terms, which can make them difficult for borrowers to repay. In some cases, mashonisa lenders may engage in predatory lending practices, taking advantage of vulnerable borrowers who are in desperate need of cash.

It's important to note that borrowing from a mashonisa lender can be risky, as there is often little recourse available if something goes wrong. Should you take a Mashonisa loan? If you need to borrow money, it's generally better to seek out a reputable financial institution that is subject to regulation and oversight.

Why Are Loan Sharks Dangerous?

Loan sharks are dangerous for several reasons:

1. High-interest rates: Loan sharks typically charge very high-interest rates, often in excess of what is legal. This means that borrowers can end up paying back much more than they originally borrowed, which can be difficult or impossible to repay.

2. Harassment and intimidation: Loan sharks may use threats, harassment, and intimidation tactics to collect payments from borrowers. This can include physical violence, damage to property, or harassment of family members or coworkers.

3. Unregulated practices: Loan sharks often operate outside the law, which means that there is no oversight or protection for borrowers. They may engage in unethical or illegal practices, such as charging hidden fees, using fraudulent documents, or threatening legal action.

4. Cycle of debt: Borrowers who cannot repay their loans may be forced to take out additional loans to cover the original debt, which can create a cycle of debt that is difficult to escape. This can lead to financial ruin and even bankruptcy.

It's important to note that borrowing from loan sharks is illegal in many countries, and can have serious consequences for both the borrower and the lender. If you are in need of money, it's better to seek out reputable financial institutions or non-profit organizations that can offer support and assistance.

What Are Alternatives To Mashonisa loans?

There are several alternatives to Mashonisa loans that you can consider if you need to borrow money. Here are a few options:

1. Microfinance institutions: Microfinance institutions offer small loans to individuals who may not have access to traditional banking services. These loans are often tailored to specific needs, and may come with lower interest rates and more flexible repayment terms than Mashonisa loans.

2. Credit unions: Credit unions are non-profit financial institutions that are owned and controlled by their members. They offer a range of financial services, including loans, savings accounts, and checking accounts. Credit unions often offer lower interest rates and more personalized service than traditional banks.

3. Peer-to-peer lending: Peer-to-peer lending platforms allow individuals to borrow money from other individuals. These loans are often offered at lower interest rates than traditional loans, and may have more flexible repayment terms.

4. Personal loans from banks: Many banks offer personal loans to individuals who meet certain credit requirements. These loans may have lower interest rates and longer repayment terms than Mashonisa loans, making them a more affordable option. 5. Government assistance programs: In some cases, government assistance programs may be available to provide financial support to individuals who are struggling financially. These programs may include grants, loans, or other forms of assistance.

It's important to explore all of your options before borrowing money, and to choose a reputable lender that can offer you fair and transparent terms.

Here Is Why MyLoan Is A Better Option

Flexible Loans

You can only take out a loan for a particular reason. When you take out a mortgage loan, for example, you can only use the funds to purchase a home. Loans provided by our partners work for various purposes, including debt consolidation and medical bill payments. Loans through MyLoan are also very flexible when it comes to interest rates, repayment terms, and loan amounts.

Several Options To Choose From

Thanks to MyLoan, South Africans now have a wealth of lending alternatives at their fingertips. The application and approval processes are both short, allowing you to acquire a loan when you need it without having to wait long. Several lenders are dedicated to making borrowing as simple as possible in South Africa, with simple applications requiring no paperwork.

With MyLoan, You Can Apply With Bad Credit Score

Having a good credit history can help you get approved for a loan. Having bad credit, on the other hand, can make it harder to obtain a loan. The good news is that you may still apply for a loan through MyLoan even if you have bad credit. This is especially true if you have a steady source of income and meet the lender's minimum lending requirements.

Get Pre-Qualification Loans

Prequalification is a type of inquiry that allows you to discover more about a lender's requirements without affecting your credit score. Furthermore, understanding what kind of loan you qualify for will give you much-needed peace of mind. It will also help you determine what price range to look within.

Fast Approvals

Depending on the turnaround time, you can receive the loan the same day or the next day after approval. This is a lifesaver if you have a financial emergency. MyLoan is a leading loan comparison website that aims to make the lives of many Pretoria residents and South African nationals easier. MyLoan lending services are simple to use and free. All of our partner lenders are licensed and offer loans that comply with the National Credit Act (NCA).