When it comes to getting a loan, South Africans have a plethora of options at their fingertips, from banks, alternative financial institutions, and private lenders. African Bank is one of South Africa’s most popular banks, offering various banking, investment, credit and loan products.
To qualify for an African Bank loan, you must be over the age of 18. You will need to submit proof of income, proof of residence, your South African barcoded ID, and your latest three months bank statements. Qualifying candidates must have a good credit record and be able to afford the monthly repayments, including interest and fees.
African Bank currently offers three types of loans: a personal loan, a consolidation loan, and the 12% loan. The loan amount is paid directly into your bank account and you may make repayments through debit orders, EFTs, EasyPay, or by visiting your local branch.
The personal loan allows you to borrow up to R250 000 with a custom repayment term, interest rate, and life insurance. The consolidation loan also allows consumers to borrow up to R250 000, however, with a consolidation loan you can consolidate up to five loans. This allows you to make lower payments overall.
Lastly, the 12% is a unique loan offering a fixed interest rate of 12% and fixed monthly repayments. This is ideal for people who have a strict budget or need to know exactly how much they will be paying for the month.
To apply for a loan you will need your latest three months' bank statements which reflect your salary/wages, as well as your latest payslip. For FICA purposes, you will also need your original South African barcoded ID and proof of residence.
Whilst you are not explicitly asked to submit a credit report, you may be asked to consent to the bank conducting credit risk background checks on you. This will include getting a credit report from a credit bureau and assessing your monthly expenses for affordability.
To apply for a loan, you can request a call back on their website or visit your local branch. This will put you in touch with a trained consultant who can guide you through the entire process. These may be better options for people who aren’t technologically savvy or would like more financial guidance.
The quickest way to apply is to create an application online through their website; there's no need to create a profile or log in. There are five components to the online application process; you can easily create an application and track your progress. You will be asked for your personal and financial details before you receive a one-time pin. Thereafter, you will be made an offer and the details of your loan will be finalised.
Unfortunately, people who are blacklisted are not likely to qualify for a loan at African Bank. If you are not yet blacklisted but are struggling to keep up with multiple lines of credit, then you can consider a consolidation loan.
If you are blacklisted and cannot get a loan, you may want to consider contacting an independent debt counselling service before making a loan application. A debt counselling service will help you to manage your existing debts through affordable payments.
Alternatively, if you are unhappy with your credit score or want help with managing your debts, you can contact the National Credit Regulator (NCR). The NCR will look through your financial history and determine the reasons for your debt. From this assessment, the NCR may be able to help you with debt alleviation and acquiring an affordable loan.
If you find yourself struggling to make repayments on your African Bank loan, the bank may offer you assistance as well. This is all dependent on your payment history, spending habits, and financial situation. African Bank may work out a payment arrangement to help you catch up on your repayment schedule. If you are unable to pay due to death, disability or retrenchment, you can claim from your insurance. Lastly, in special circumstances, African Bank may consider giving you a payment break.
While your application may not explicitly ask for a credit report, this may be a qualifying factor in many cases. To ensure that you qualify for a loan and receive the best possible interest rate, build a good credit standing. This means creating and maintaining lines of credit, such as credit cards and retail credit cards, over five or more years.
Your application does require your latest three months' bank statements and payslips. Therefore, it's important to cultivate good spending habits. You can track your spending habits using an app or by going through your statements. It's also important to show that you can budget your money and pay important bills, such as your rent or mortgage, on time.
A very important aspect to look at when deciding on a loan is the interest rate. So, does African Bank offer a competitive interest rate on their loans? African Bank currently offers a fixed interest rate between 15.00% and 24.50% on personal loans.
This interest rate range is about the same as those offered by some competing banks and lending institutions such as Sanlam. FNB does offer interest rates starting from 12.5% on their personal loans. Standard Bank and Absa’s personal loans both have interest rates starting at 13.25%.
The lower the interest rate, the more affordable the loan will be for you in the loan run. Some loans may offer a longer loan term however, you may find yourself paying higher interest rates or more in interest overall.
When you receive your loan offer make a note of the interest rate you are offered and the loan terms and conditions. If you don’t understand anything like the payment schedule or penalties, be sure to talk to a consultant. Additionally, you can query the interest rate you are offered and get a quote from an alternative bank. Understanding your financial situation, credit risk, and the current standard in interest rates can help you get the best deal.
One unique benefit to African Bank's loans is their exclusive deals on technological devices such as mobile phones and laptops. You can browse the deals on offer on their website and simply add the value of the deal to your loan amount. This will consolidate the payment on the device and your existing or new loan. This is ideal for people who have taken out a personal loan to fund their tertiary education or do not want to open another line of credit for a device.
Applying for a loan can be complicated, there's a ton of paperwork and terms and conditions that you need to keep track of. Fortunately, BudgetGist is here to keep you informed. We are South Africa's information hub for all things related to finance and money.
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