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.
Are Mashonisa loans legit?
A loan Mashonisa, which is another term for a loan shark, is an unregulated moneylender who preys on low-income families or individuals who are in financial need. The National Credit Act (NCA) regulates licensed moneylenders and requires them to meet the National Credit Act (NCA) code of conduct.
Loan sharks do not have a license and operate illegally. If you borrow from them, you'll almost certainly obtain a loan with bad terms.
For instance, you will be forced to pay a high-interest rate, harassed if you fall behind on your payments, and be coerced into borrowing more money from them to pay off one loan with another.
To understand why you shouldn’t take it, you need to know how it works.
This is how Mashonisas operate in Pretoria
After all your wage deductions, if you take home R1,800, you'll probably be able to acquire R1000 in credit from the unregistered loan sharks.
You run out of money near the end of the month and have an unexpected expense, so you take your pay stub to those who guarantee quick and cheap cash loans. Then Mashonisas force you to sign papers giving them access to your bank account so they can deduct the principal plus the excessive interest from your account.
You require R1000. Thus the money is given to you in cash when applying for the loan. After receiving your salary at the end of the month, the Mashonisas deduct an amount of R1000 plus interest of around R400, leaving you with only R400 in the bank and a new month. As a result, you're back at Mashonisa's door, searching for the following loan. Ultimately, you end up stuck in a brutal credit trap that continues from month to month.
Why Loan Sharks Are Dangerous
All lenders must be authorized and regulated by the National Credit Act (NCA) to lend money legally in South Africa. This ensures that lenders follow specific regulations and that borrowers are protected somehow.
Loan sharks are illegal since they are not regulated. Loan sharks, unlike authorized lenders, may not feel obligated to follow any of the NCA guidelines, putting borrowers at risk.
Loan sharks, for example, frequently charge extremely high interest rates and may threaten you with violence if you fail to pay. Even if you only borrow a modest amount of money at first, a loan shark can lure you in and leave you owing thousands of dollars.
Some loan sharks may be involved in other types of illegal activity. Borrowers have been dragged into even serious and dangerous situations to repay their loans, such as drug peddling.
After borrowing from a loan shark, it's pretty simple to become locked in a debt spiral, which can have long-term ramifications for you financially and other elements of your life, such as your mental health and relationships with family and friends.
Other Ways Of Borrowing - MyLoan Alternative
When life throws you a curveball, knowing where you can get money quickly and how long it takes to secure a loan from various sources comes in handy. You can use a loan to pay for repairs, health care, and other issues.
So are there any alternatives to taking out a loan from a loan shark? Yes, MyLoan is a safer alternative to access money or cover costs, even if you have a low income or a bad credit rating.
With less paperwork, it’s easy to apply for credit with MyLoan, and compared to the Mashonisa loan, the funds are disbursed quickly and at a low-interest rate. All you have to do now is meet the eligibility criteria.
There's only one application form to fill out. Once you apply, we’ll forward it to several lenders who will review it and, if you qualify, get back to you with an offer. You choose the most suitable loan for you and obtain funds after completing the application.
Here Is Why MyLoan Is A Better Option
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 May Even Apply With Bad Credit
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.
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).
To help you choose the right loan, we provide an estimate of the cost and show you different loans you can apply for.