Best Personal Loan lenders in South Africa for 2025
- Written by Wesley Vos
- Updated
Personal Loans
Capitec: Best for low interest rates
Annual Interest (APR)
13.5-29.25%
Loan Amount
R10k-R500k
Loan Term
12 mo-7 yrs
Apply on partner site
Pros & cons
Pros
- Fast, easy online applications
- Same-day approval and fund access
- Personalized interest rates
- Flexible loan terms (up to 84 months)
- Optional credit insurance for added protection
Cons
- High interest rates for low-credit applicants
- Strict qualification criteria
- Possible high initiation and admin fees
- Credit insurance may increase total cost
Our take
Overview
Capitec is one of South Africa’s largest and most trusted banks, founded in 2001 and headquartered in Stellenbosch. The bank has grown significantly due to its focus on simplicity and accessibility, making banking services available to millions of customers through both digital and traditional means. Capitec’s personal loans are popular for their flexibility, competitive interest rates, and easy online application process.
With Capitec, you can apply for a personal loan up to R500,000, with repayment periods ranging from 12 to 84 months. Capitec also offers personalized interest rates, starting from 13.5%, based on your credit profile. The bank emphasizes a customer-centric approach, offering quick approvals, with funds often disbursed the same day of approval, making it a go-to option for many South Africans seeking personal financing.
Key Facts
- Loan Amount: Capitec offers personal loans ranging from R10,000 to R500,000, providing options for a variety of financial needs.
- Repayment Terms: Loans can be repaid over 12 to 84 months, allowing borrowers to choose a term that fits their budget.
- Interest Rates: Interest rates start from 13.5% per annum, based on the applicant’s credit profile and affordability.
- Application Process: You can apply online, through the Capitec app, or in-branch, with approvals typically completed in minutes.
- Same-day Funds: For approved applicants, funds are available immediately, providing quick access to money when needed.
- Credit Insurance: Optional credit insurance is available to cover retrenchment, death, or disability, offering additional peace of mind.
Known qualification requirements
- Minimum age: 18 years
- Valid South African ID
- Latest payslip
- Three months’ bank statements
- Proof of residence (less than three months old)
Fees
- Initiation fee: Up to R1,207.50
- Monthly admin fee: R69
- Interest rate: 12.9% to 29.25% (depending on credit profile)
Time to receive funds
Once approved, funds are typically available immediately, offering same-day access to your loan amount.
Illustrative Example
Loan Amount: R50,000.00
Repayment Terms: 48 months (4 years)
Annual Interest Rate: 22% (dependent on your credit rating)
Fees: Initiation fee of R1,207.50 and monthly admin fee of R69
Monthly Instalment: R1,741.00
Total Cost of Credit: R33,568.00 (interest over the loan term)
Total Repayment: R83,568.00
*Please note this is just an illustrative example. Your rate and fees will depend on your personal risk profile. To get an accurate quote, request one directly from Capitec.
Personal Loans
First National Bank: Best for quick approval and digital application

Annual Interest (APR)
17.5-29%
Loan Amount
R1k-R360k
Loan Term
1-6 yrs
Apply on partner site
Pros & cons
Pros
- Competitive interest rates for qualifying applicants
- Flexible repayment terms up to 72 months
- Quick approval and funds disbursement
- Digital application via FNB app or online
- Personalized loan offers for better rates
Cons
- High initiation fee on larger loan amounts
- Requires stable income for approval
- Higher rates for lower credit profiles
- Monthly admin fee applies
Our take
Overview
First National Bank (FNB) is one of South Africa’s largest and most established banks, providing a wide array of financial services, including personal loans, to millions of South Africans. Known for its innovation and customer-centric approach, FNB has a long-standing reputation for offering reliable and accessible banking solutions. FNB’s personal loans are designed to cater to various financial needs, from debt consolidation to funding big-ticket purchases.
With competitive interest rates and flexible loan terms, FNB’s personal loans offer customers transparent and customizable borrowing options. The bank also provides a convenient online application process, making it easy for customers to apply and track their loans digitally. FNB’s personalized loan offers cater to different credit profiles, ensuring that customers can find options suited to their specific financial situations.
Key Facts
- Loan Amount: FNB offers personal loans ranging from R1,000 to R360,000, allowing flexibility for different financial needs.
- Interest Rates: Rates range between 17.50% and 29% per annum, adjusted based on credit score and loan term.
- Repayment Terms: Loan terms range from 1 to 72 months, giving customers flexible repayment options.
- Digital Application: Apply online or via the FNB app, with quick processing times.
- CreditLife Insurance: FNB provides a mandatory (for long-term loans) insurance plan to cover repayments in unforeseen circumstances.
- Personalized Offers: Loan offers are tailored to each customer’s financial profile, with competitive rates for qualifying customers.
- No Penalty Fees: You can choose to pay extra whenever its suitable for you, or even settle your personal loan without paying any penalties
- Take-A-Break January: Keep your personal loan up to date and automatically get a well-deserved payment break every January. You can decide not to take a payment break and to pay your monthly instalment, thereby settling your personal loan quicker and save on interest fees.
Known qualification requirements
- South African ID document
- Proof of monthly income
- Bank statements (typically 3 months)
- Proof of residence (recent utility bill)
Fees
- Initiation Fee: Typically between R150 and R1,207.50 (depending on loan size)
- Monthly Admin Fee: R69.00 added to monthly instalments
- CreditLife Insurance: Cost varies based on loan amount and term.
Time to receive funds
Funds are typically available within 24 hours of approval. However, processing may be faster for FNB account holders and can vary depending on the loan amount and verification requirements.
Illustrative Example
Loan Amount: R30,000.00
Repayment Terms: 24 months
Annual Interest Rate: 18.00% (dependent on your credit rating)
Fees: Initiation fee of R1,207.50 and monthly admin fee of R69
Monthly CreditLife Insurance: R100
Monthly Instalment: R1,796.00
Total Cost of Credit: R13,104.00 (interest over the loan term)
Total Repayment: R43,104.00
*Please note this is just an illustrative example. Your rate and fees will depend on your personal risk profile. To get an accurate quote, request one directly from FNB.
Personal Loans
DirectAxis: Best for debt consolidation

Annual Interest (APR)
24.5-28.25%
Loan Amount
R5k-R300k
Loan Term
2-6 yrs
Apply on partner site
Pros & cons
Pros
- No collateral required for personal loans.
- Quick approval and funds disbursed within 48 hours.
- Fixed interest rates ensure predictable monthly payments.
- Personal Protection Plan covers loan in case of emergencies.
- Loans available up to R300,000.
Cons
- High interest rates, up to 28.25%, for riskier profiles.
- Initiation fee and service fees add to the loan cost.
- Strict credit checks may affect loan eligibility.
- Personal Protection Plan increases overall loan cost if opted in.
- Limited loan term flexibility compared to some competitors.
Our take
Overview
Direct Axis, established in 1995, is one of South Africa’s leading financial services providers, specializing in personal loans and debt consolidation. Over the years, Direct Axis has gained a solid reputation for its customer-centric approach and efficient online application process. Their loans are aimed at helping individuals cover various expenses, such as education, home improvements, or debt management, without the need for collateral.
Direct Axis offers unsecured personal loans with flexible repayment terms ranging from 24 to 72 months, making it accessible for customers with varying financial needs. The loan application is fully online, and once approved, customers can receive their funds within 48 hours. Direct Axis also provides a Personal Protection Plan, which covers the loan balance in case of death or disability, offering borrowers peace of mind.
Key Facts
- Loan Amount: Direct Axis offers personal loans ranging from R5,000 to R300,000, providing financial assistance for diverse needs.
- Loan Term: Repayment terms vary from 24 to 72 months, offering flexibility in repayment schedules.
- Interest Rate: Interest rates are capped at 28.25% per annum, depending on credit profile and loan amount.
- Personal Protection Plan: Loans include a Personal Protection Plan, ensuring coverage in case of disability, death, or severe illness.
- Fast Approvals: Direct Axis provides loan approval within 48 hours, with quick disbursement of funds.
Known qualification requirements
- South African ID
- Proof of residence (not older than 3 months)
- Three months’ bank statements
- Latest payslip
- Minimum monthly income of R5,000
Fees
- Initiation Fee: Up to R1,207.50, depending on loan amount.
- Monthly Service Fee: R69.
- Credit Life Insurance: Optional Personal Protection Plan covering death and disability.
Time to receive funds
Direct Axis typically disburses funds within 48 hours after loan approval, offering fast access to funds for urgent needs.
Illustrative Example
Loan Amount: R50,000
Repayment Term: 72 months
Annual Interest Rate: 29%
Fees: Initiation fee of R1,207.50 (added to loan amount) + R69 monthly admin fee
Monthly Instalment: R1,552.23
Total Cost of Credit: R61,760.74
Total Repayment: R111,760.74
*Please note this is an illustrative example. Your rate and fees will depend on your personal risk profile. To get an accurate quote, request one directly from Direct Axis.
Personal Loans
African Bank: Best for transparent fee structure

Annual Interest (APR)
15-24.50%
Loan Amount
R2k-R250k
Loan Term
7 mo-6 yrs
Apply on partner site
Pros & cons
Pros
- Fixed monthly repayment rate
- Competitive rates
- Repayment term up to 6 years
- Simple online application
Cons
- Poor customer service reported by some clients
- No protection plan found online
Our take
Overview
African Bank, founded in 1975, has grown to become a trusted name in South Africa’s financial sector. Specializing in providing accessible credit solutions, African Bank offers a range of financial services including personal loans, savings, and credit cards. The bank’s focus is on affordability and transparency, making it a popular choice for borrowers across the country.
African Bank’s personal loans are designed to cater to a variety of needs, such as home renovations, debt consolidation, and other personal expenses. With loan amounts ranging from R2,000 to R250,000 and flexible repayment terms, the bank offers convenient options for individuals seeking financial support without needing collateral. The loans come with fixed interest rates, ensuring predictable monthly payments throughout the loan term.
Key Facts
- Loan Amount: African Bank offers personal loans ranging from R2,000 to R250,000, accommodating both small and large financial needs.
- Loan Term: Borrowers can choose repayment terms between 7 and 72 months, providing flexibility in repayment schedules.
- Interest Rate: Interest rates range from 15% to 24.50% annually, based on the borrower’s credit profile.
- Credit Life Insurance: The loans come with optional Credit Life Insurance, providing protection against unexpected events like death or disability.
- Quick Application: Loan applications can be completed online or via mobile app, with funds typically disbursed within 24 to 48 hours.
Known qualification requirements
- South African ID document
- Three months’ bank statements showing salary deposits
- Recent payslip
- Proof of residence (not older than 3 months)
- Minimum age of 18 years
Fees
- Initiation Fee: Applicable based on the loan amount, up to R1,207.50.
- Monthly Service Fee: R69, added to monthly repayments.
- Credit Life Insurance: Optional insurance fee based on loan terms and amount.
Time to receive funds
African Bank typically disburses funds within 24 to 48 hours after loan approval, making it a quick solution for urgent financial needs.
Illustrative Example
Loan Amount: R20,000
Repayment Term: 12 months
Annual Interest Rate: 15%
Fees: Initiation fee of R1,207.50 + R69 monthly service fee
Monthly Instalment: R2,036
Total Cost of Credit: R4,432.00 (interest)
Total Repayment: R24,432.00
*Please note this is just an illustrative example. Your rate and fees will depend on your personal risk profile. To get an accurate quote, request one directly from African Bank.
Personal Loans
Absa: Best for personalized interest rates

Annual Interest (APR)
13.75-29.25%
Loan Amount
R3k-R350k
Loan Term
1-7 yrs
Apply on partner site
Pros & cons
Pros
- Loan amounts up to R350,000, offering flexibility for various needs.
- Rate Beat Guarantee ensures competitive interest rates.
- Option for online, phone, or in-branch applications.
- Flexible repayment terms of up to 84 months.
- Optional credit protection for added financial security.
Cons
- Higher interest rates for borrowers with lower credit scores.
- Monthly service fees add to the total cost.
- High initiation fees on larger loans.
- Strict documentation requirements for approval.
- Not available to non-South African residents.
Our take
Overview
Absa is one of South Africa’s leading banks, known for its wide range of financial products, including personal loans. Absa’s personal loans are designed to offer flexibility and ease for various needs, such as debt consolidation, education costs, or home improvements. With over a century of banking experience, Absa has built a reputation for providing reliable and efficient lending services.
Absa’s personal loans feature competitive interest rates, flexible repayment terms ranging from 12 to 84 months, and a simple application process. They also offer a Rate Beat Guarantee, ensuring that if you find a lower interest rate elsewhere, Absa will beat it. Additionally, borrowers have the option to include credit protection insurance, which provides coverage in case of disability, death, or retrenchment.
Key Facts
- Loan Amount: Absa offers personal loans up to R350,000, making it suitable for large financial needs.
- Loan Term: Repayment periods range from 12 to 84 months, allowing flexible and manageable repayments.
- Interest Rates: Absa provides personalized interest rates based on your credit profile, with annual rates between 13.75% and 29.25%, depending on the loan amount and term.
- Rate Beat Guarantee: Absa promises to beat any lower interest rate you find elsewhere, ensuring you get the best deal.
- Flexible Application: Apply for loans online, via phone, or at an Absa branch, providing multiple convenient options.
Known qualification requirements
- Minimum income of R2,000 per month
- South African ID
- Proof of residence (not older than 3 months)
- 3 months’ payslips or bank statements
- Applicants must be 18 years or older
Fees
- Initiation Fee: Up to R1,207.50 depending on the loan amount.
- Monthly Service Fee: R69 per month.
- Credit Protection Insurance: Optional, offering coverage for disability, retrenchment, or death.
Time to receive funds
Once approved, Absa generally disburses funds within 24-48 hours for online applications. For in-branch applications or if further documentation is required, it may take up to 3 business days.
Illustrative Example
Loan Amount: R50,000.00
Repayment Terms: 36 months (5 years)
Annual Interest Rate: 18% (dependent on your credit rating)
Fees: Initiation fee of R1,207.50 and monthly admin fee of R69
Monthly Instalment: R2,113.00
Total Cost of Credit: R26,068.00 (interest over the loan term)
Total Repayment: R76,068.00
*Please note this is just an illustrative example. Your rate and fees will depend on your personal risk profile. To get an accurate quote, request one directly from Absa.
Personal Loans
Wesbank CashPower: Best for quick approvals
Annual Interest (APR)
19-29%
Loan Amount
R5k-R300k
Loan Term
2-6 yrs
Apply on partner site
Pros & cons
Pros
- Fixed interest rates for predictable repayments.
- Loan amounts up to R300,000 for larger financial needs.
- Same-day loan approval and payout.
- Flexible repayment terms of up to 72 months.
- Option to add customer protection insurance.
Cons
- Interest rates start at 19%, higher for riskier profiles.
- Monthly service fees increase overall loan cost.
- Credit checks required, limiting access for those with poor credit.
- Loan initiation fees on larger loans.
- No option for secured loans, limiting flexibility.
Our take
Overview
WesBank, a subsidiary of FirstRand Bank, has been a key player in South Africa’s financial services industry for over 40 years. While primarily known for its vehicle financing, WesBank offers personal loans through its CashPower Personal Loan product. This loan is tailored to meet various personal financial needs, whether for home improvements, education, or emergency expenses.
WesBank provides loans up to R300,000 with flexible repayment terms ranging from 24 to 72 months. They offer fixed interest rates, which means borrowers don’t need to worry about fluctuating payments. WesBank is trusted for its reliable service, ensuring fast approvals and same-day payouts for qualifying applicants.
Key Facts
- Loan Amount: WesBank offers personal loans ranging from R5,000 to R300,000, providing financial solutions for various needs.
- Loan Term: Repayment terms range from 24 to 72 months, giving borrowers flexibility in repayment.
- Interest Rates: Annual interest rates start from 19%, depending on your credit profile and risk assessment.
- Same-Day Approval: WesBank provides same-day loan approval, with funds typically available within 24 hours.
- Fixed Interest Rates: Borrowers benefit from fixed interest rates, ensuring predictable monthly repayments throughout the loan term.
Known qualification requirements
- South African ID
- Proof of residence (not older than 3 months)
- Three months’ bank statements
- Latest payslip
- Minimum monthly income of R5,000
Fees
- Initiation Fee: Charged up to R1,207.50, depending on the loan amount.
- Monthly Service Fee: R69 monthly.
- Customer Protection Plan: Optional insurance covering life events like disability or death.
Time to receive funds
WesBank typically disburses funds within 24 hours after loan approval, providing quick access to funds for emergency needs.
Illustrative Example
Loan Amount: R60,000.00
Repayment Terms: 72 months (6 years)
Annual Interest Rate: 24.5% (dependent on your credit rating)
Fees: Initiation fee of R1,207.50 and monthly admin fee of R69
Monthly Instalment: R2,607.83
Total Cost of Credit: R77,754.32 (interest over the loan term)
Total Repayment: R137,754.32
Disclaimer: Please note this is just an illustrative example. Your rate and fees will depend on your personal risk profile. To get an accurate quote, request one directly from WesBank.
Personal Loans
Wonga: Best for short-term loans

Annual Interest (APR)
60%
Loan Amount
R500-R8k
Loan Term
4 days-6 mo
Apply on partner site
Pros & cons
Pros
- Same-day loan disbursement for urgent needs.
- Fully online application process, convenient and fast.
- Flexible repayment terms for short-term borrowing.
- Transparent fee structure with no hidden costs.
- Allows early repayment without penalties.
Cons
- High monthly interest rate of 5%.
- Limited loan amounts, especially for new customers.
- Not suitable for long-term financial needs.
- Strict income verification required.
- Potential impact on credit score for missed payments.
Our take
Overview
Wonga is a well-established online lender in South Africa, primarily offering short-term personal loans designed for emergency financial needs. Launched in South Africa in 2012, Wonga has become a popular choice for individuals needing quick cash injections, such as covering unexpected expenses or small personal needs. The company provides a fully online application process, allowing for quick approvals and same-day payouts for qualifying applicants.
Wonga is known for its transparent loan offerings and flexible repayment terms. New customers can borrow up to R4,000, while returning customers can access loans up to R8,000, with repayment periods ranging from 4 days to 6 months. Their focus on short-term lending ensures that customers are not locked into long repayment cycles, making them a go-to option for those looking to cover immediate financial shortfalls.
Key Facts
- Loan Amount: New customers can borrow up to R4,000, while returning customers can access up to R8,000.
- Loan Term: Flexible repayment periods range from 4 days to 6 months, allowing borrowers to tailor payments to their cash flow.
- Interest Rate: Wonga charges 5% interest per month, ensuring transparency in total costs.
- Fast Approval: Applications are processed entirely online with same-day approval and disbursement, providing quick access to funds.
- No Hidden Fees: All costs, including interest and fees, are clearly displayed upfront using Wonga’s loan calculator.
Known qualification requirements
- South African ID number
- Proof of income (recent payslip or bank statement)
- Valid cellphone number
- South African bank account
Fees
- Initiation Fee: Charged based on loan amount, applied upon approval.
- Monthly Service Fee: A standard R69 per month is charged for the duration of the loan.
- Interest: 5% per month, charged on the outstanding balance.
Time to receive funds
Once approved, Wonga typically disburses funds within the same business day, provided the application is submitted and approved by 3 PM.
Illustrative Example
Loan Amount: R5,000.00
Repayment Terms: 3 months
Annual Interest Rate: 5% per month
Fees: R69 monthly admin fee and initiation fee based on loan amount
Monthly Instalment: R1,836.04
Total Cost of Credit: R1,922.63 (interest over the loan term)
Total Repayment: R6,922.63
*Please note this is just an illustrative example. Your rate and fees will depend on your personal risk profile. To get an accurate quote, request one directly from Wonga.
Personal Loans
Standard Bank: Best for large loan amounts

Annual Interest (APR)
10.5-27.5%
Loan Amount
R3k-R300k
Loan Term
1-7 yrs
Apply on partner site
Pros & cons
Pros
- Flexible loan amounts and terms (12-84 months).
- No penalties for early settlement.
- Quick online application with instant disbursement for existing customers.
- Competitive interest rates for borrowers with good credit.
- Loan protection insurance available for peace of mind.
Cons
- Higher interest rates for lower credit scores.
- Monthly service fees add to the overall cost.
- Slower approval process for non-digital applications.
- High initiation fees on larger loans.
- Stringent income verification for self-employed applicants.
Our take
Overview
Standard Bank, one of South Africa’s largest and most established financial institutions, offers a range of personal loan products designed to meet a variety of financial needs. With over 150 years of experience in the banking sector, they provide reliable and flexible loan options for purposes such as home improvements, debt consolidation, education, and other personal expenses.
Their personal loans are known for competitive interest rates and flexible repayment terms, ranging from 12 to 72 months. The bank also provides a seamless online application process, allowing customers to apply and receive funds quickly. Standard Bank offers loan protection insurance to cover borrowers in the event of retrenchment, disability, or death, adding a level of security to its offerings.
Key Facts
- Loan Amount: Standard Bank offers personal loans ranging from R3,000 to R300,000, providing flexibility to suit various financial needs.
- Loan Term: Loan repayment terms range from 12 to 72 months, giving borrowers the flexibility to choose a repayment schedule that fits their budget.
- Interest Rates: Annual interest rates start from 10.5%, with rates tailored to individual credit profiles, ensuring borrowers receive competitive rates.
- Fees: The bank charges an initiation fee between R419.75 and R1,207.50, depending on the loan size, along with a monthly service fee of R69.
- Early Repayment Flexibility: Customers can settle their loans early without incurring any penalties, allowing for potential interest savings.
Known qualification requirements
- South African ID book or card
- 3 months of payslips (or 6 months for commission-based earners)
- Proof of residence (not older than 3 months)
- Proof of income (for self-employed individuals)
Fees
- Initiation Fee: R419.75 to R1,207.50 depending on loan size
- Monthly Service Fee: R69 throughout the loan term
- Insurance: Personal Loan Protection Cover is included in the loan offer
Time to receive funds
For existing Standard Bank customers applying through digital platforms, funds are disbursed immediately after approval. For new customers or those applying in-branch, it typically takes 1-3 business days to receive funds.
Illustrative Example
Loan Amount: R30,000.00
Repayment Terms: 36 months (3 years)
Annual Interest Rate: 24.75% (dependent on your credit rating)
Fees: Initiation fee of R1,207.50 and monthly admin fee of R69
Monthly Instalment: R1,423.00
Total Cost of Credit: R21,228.00 (interest over the loan term)
Total Repayment: R51,228.00
*Please note this is just an illustrative example. Your rate and fees will depend on your personal risk profile. To get an accurate quote, request one directly from Standard Bank.
Personal Loans
Sanlam: Best for customer service
Annual Interest (APR)
16-29%
Loan Amount
R5k-R350k
Loan Term
1-7 yrs
Apply on partner site
Pros & cons
Pros
- Fixed interest rates ensure stable repayments.
- Loans up to R350,000 for larger needs.
- Earn up to 10% back through Wealth Bonus.
- Flexible repayment terms from 12 to 84 months.
- Fast and convenient online application process.
Cons
- High initiation fees on larger loan amounts.
- Interest rates start at 16%, higher than some competitors.
- Wealth Bonus only available to qualifying customers.
- Credit life insurance is optional but increases the overall cost.
- Strict credit checks may limit loan eligibility for those with poor credit history.
Our take
Overview
Sanlam is one of South Africa’s leading financial institutions, with over 100 years of experience in the financial services sector. Known for its diverse product offerings, including insurance, investment, and loan solutions, Sanlam caters to a broad range of customer needs. Sanlam’s personal loans are designed to provide quick access to funds for various purposes such as home improvements, debt consolidation, or covering unexpected expenses.
Sanlam offers loan amounts up to R300,000, with flexible repayment terms ranging from 12 to 84 months. Their loans come with a fixed interest rate, allowing borrowers to manage consistent monthly payments without the worry of fluctuating interest rates. Additionally, Sanlam offers qualifying customers the opportunity to earn a Wealth Bonus, which rewards borrowers with up to 10% of their loan amount back.
Key Facts
- Loan Amount: Sanlam offers personal loans ranging from R5,000 to R300,000, catering to a wide range of financial needs.
- Loan Term: Repayment terms are flexible, ranging from 12 to 84 months, allowing customers to choose terms that suit their budget.
- Interest Rate: Sanlam offers fixed interest rates between 16% and 29% per annum, ensuring stable monthly payments throughout the loan term.
- Wealth Bonus: Borrowers can earn up to 10% of their loan amount in the form of a Wealth Bonus, a unique feature offered by Sanlam.
- Online Application: The application process is fully online, with fast approvals and convenient access to funds.
Known qualification requirements
- South African ID
- Proof of income (recent payslip or bank statement)
- Proof of residence
- Bank account details where the salary is paid
Fees
- Initiation Fee: Up to R1,207.50, depending on the loan amount.
- Monthly Service Fee: R69 per month.
- Credit Life Insurance: Optional, covering life events like disability or retrenchment.
Time to receive funds
Upon approval, Sanlam typically disburses funds within 48 hours, ensuring that customers can quickly access the money they need.
Illustrative Example
Loan Amount: R50,000.00
Repayment Terms: 72 months (6 years)
Annual Interest Rate: 27.29% (dependent on your credit rating)
Fees: Initiation fee of R1,207.50 and monthly admin fee of R69
Monthly Instalment: R2,569.36
Total Cost of Credit: R52,085.93 (interest over the loan term)
Total Repayment: R102,085.93
*Disclaimer: Please note this is just an illustrative example. Your rate and fees will depend on your personal risk profile. To get an accurate quote, request one directly from Sanlam.
Personal Loans
Finchoice: Best for flexible repayment plans
Pros & cons
Pros
- Flexible loan terms up to 36 months.
- Same-day approval and payout process.
- Fixed interest rate throughout the loan term.
- 14-day no-fee return policy.
- Convenient online application.
Cons
- Higher interest rates compared to traditional banks.
- Initiation fees on larger loans.
- Limited loan amounts for new customers.
- No option for in-person applications.
- Monthly service fees increase the total loan cost.
Our take
Overview
Finchoice is a digital financial services provider, a subsidiary of the HomeChoice Group, known for offering fast and flexible personal loans to South African customers. Established to cater to a growing market for convenient online lending, Finchoice has gained popularity for its easy application process and same-day payouts. The company’s personal loans are structured to address various financial needs, including debt consolidation, emergency expenses, and other unexpected financial obligations.
Finchoice offers a range of loan products, including Flexi Loans and Premier Loans, providing flexibility in terms of loan amounts and repayment periods. Borrowers can access up to R40,000 for up to 36 months, with the added benefit of a personalized interest rate that remains fixed throughout the term. The online application system is user-friendly, allowing customers to apply from anywhere and receive quick approval and disbursement of funds.
Key Facts
- Loan Amount: Finchoice offers personal loans ranging from R8,000 to R40,000, with flexibility depending on the borrower’s financial profile.
- Loan Term: Repayment terms range from 6 to 36 months, allowing borrowers to choose a period that suits their financial situation.
- Interest Rates: Finchoice provides fixed, personalized interest rates, which means the rate remains constant throughout the loan term.
- Fast Approval: The application process is entirely online, with same-day approval and payouts for most loans.
- 14-Day Return Policy: Borrowers can return the loan within 14 days without incurring interest or fees, providing extra flexibility in case the loan is no longer needed.
Known qualification requirements
- South African ID
- 3 months’ bank statements
- Recent payslips
- Proof of residence
Fees
- Initiation Fee: Charged depending on the loan amount, up to a maximum of R1,207.50.
- Monthly Service Fee: R69 per month.
- Credit Insurance: Optional, covering events such as death, disability, or loss of income.
Time to receive funds
For approved applications, Finchoice typically disburses funds within 24 hours, ensuring that borrowers have quick access to the money they need.
Illustrative Example
Loan Amount: R100,000.00
Repayment Terms: 60 months (5 years)
Annual Interest Rate: 17.5% (dependent on your credit rating)
Fees: Initiation fee of R1,207.50 and monthly admin fee of R69
Monthly Instalment: R2,512.22
Total Cost of Credit: R56,080.78 (interest over the loan term)
Total Repayment: R156,080.78
*Please note this is just an illustrative example. Your rate and fees will depend on your personal risk profile. To get an accurate quote, request one directly from Finchoice.
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Lender | Best For | Est. Apr | Loan Amount | Loan Term |
---|---|---|---|---|
Capitec | Low interest rates | 13.5-29.25% | R10k-R500k | 1 - 7 years |
First National Bank | Quick approval and digital application | 17.5-29% | R1k-R360k | 1-6 years |
Finchoice | Flexible repayment plans | 17.5% | R8k-R40k | 6 - 36 months |
DirectAxis | Debt consolidation | 24.5-28.25% | R5k-R300k | 2 - 6 years |
African Bank | Transparent fee structure | 15-24.5% | R2k-R250k | 7 months - 6 years |
Absa | Personalised interest rates | 13.75-29.25% | R3k-R350k | 1 - 7 years |
WesBank | Quick approvals | 19-29% | R5k-R300k | 2 - 6 years |
Wonga | Short-term loans | 5% per month | R500-R8k | 4 days - 6 months |
Standard Bank | Large loan amounts | 10.5-27.5% | R3k-R300k | 1 - 7 years |
Sanlam | Customer service | 16-29% | R5k-R350k | 1 - 7 years |
Pros and cons of personal loans
While personal loans can be helpful, they may not be the best financing option for everyone. It’s important to weigh the pros and cons before making a decision.
- Fast funding times
- Lower interest rates than credit cards
- Few restrictions on how funds are used
- No collateral required in most cases
- Money in one lump sum
- Potentially high fees and penalties
- Eligibility requirements can be strict
- Additional monthly payment
- Shorter terms than home equity loans
- Credit damage if you default
What is a Personal Loan?
A personal loan is a type of unsecured loan that provides you with a lump sum amount to use for various purposes. Unlike home or car loans, personal loans don’t require collateral, which means you don’t have to put up an asset as security. The loan is typically repaid in fixed monthly instalments over a set period, with interest applied. Personal loans are flexible, making them suitable for a range of financial needs, whether it’s covering unexpected expenses or consolidating debt.
Loan Use Cases
Why might you consider a personal loan?
Personal loans are versatile and can be used in many ways. Here are some common reasons South Africans take out personal loans:
- Debt Consolidation: Combine multiple high-interest debts into one manageable loan, potentially lowering your overall interest.
- Emergency Expenses: Cover unexpected costs like medical bills or urgent home repairs without waiting for payday.
- Short-Term Cash Flow Needs: Manage temporary cash flow gaps or large expenses without impacting your savings.
- Home Improvements: Fund essential home repairs, upgrades, or renovations without the need for a home equity loan.
Loan Eligibility Factors
What do lenders typically look for when approving a personal loan?
While each lender may have specific requirements, here are some general factors most consider:
- Minimum Income Requirements: Lenders often require a stable monthly income, with some setting a minimum at around R3,500 to R5,000.
- Credit Score Considerations: A good credit score can help you secure lower interest rates, though some lenders may work with lower scores.
- Employment Status Requirements: Proof of steady employment or regular income, typically for at least 6-12 months, is often needed.
- Age Limitations: Applicants must be at least 18 years old, with many lenders capping the age at around 65-70 at the loan’s end.
Credit Score Impact and How to Improve It
How does your credit score affect your personal loan?
Your credit score plays a significant role in determining the interest rate and loan amount you qualify for. A higher score usually results in more favourable terms, while a lower score may lead to higher rates or stricter terms.
Tips to Improve Your Credit Score:
- Pay Bills on Time: Consistently paying all bills and debts on time builds a strong payment history.
- Lower Your Debt: Reducing outstanding debt improves your credit utilization ratio, which positively affects your score.
- Review Your Credit Report: Regularly check your credit report for accuracy and dispute any errors with credit bureaus like TransUnion.
- Limit New Credit Applications: Applying for multiple loans or credit cards in a short period can lower your score, so only apply when necessary.
Interest Rates Breakdown
How do interest rates work for personal loans in South Africa?
Interest rates on personal loans can vary widely depending on factors like your credit profile, the loan amount, and the lender’s policies. Here’s what to consider:
- Typical Interest Rate Ranges: Personal loan rates in South Africa generally range from 10.5% to 29.25% APR, depending on the lender and your financial profile.
- Factors Affecting Rates: Key factors include your credit score, income level, loan term, and loan amount.
- Fixed vs. Variable Rates: Most personal loans have fixed rates, which means your monthly repayment stays consistent over the loan term.
What is APR?
The Annual Percentage Rate (APR) represents the total yearly cost of borrowing, including both interest and any fees. It provides a clearer picture of the loan’s full cost, making it easier to compare different offers.
Early Repayment Flexibility
Can you pay off a personal loan early?
Many lenders offer early repayment options, which can help you save on interest costs. However, terms vary:
- No Penalty with Certain Lenders: Some lenders allow early repayment without penalties, so you save on interest by paying off the loan sooner.
- Early Settlement Fees: Others may charge a fee for early repayment, so it’s essential to check the loan agreement for details.
- Review the Fine Print: Confirm the terms with your lender to ensure you know of any potential early settlement fees.
Comparison with Other Loan Types
How does a personal loan compare to other financing options?
- Credit Cards: Personal loans offer fixed terms and rates, making them a better choice for planned expenses, while credit cards provide revolving credit but often at higher rates.
- Payday Loans: Payday loans offer quick cash but have higher interest rates and shorter repayment terms than personal loans.
- Home Loans: Home loans are secured and have lower rates, but personal loans provide quicker access to funds without needing collateral.
Personal loans offer a balance between accessibility, manageable interest rates, and flexible use, making them a versatile choice for many financial needs.
Regulatory and Legal Considerations in South Africa
What protections are in place for personal loan borrowers?
In South Africa, personal loans are governed by the National Credit Act (NCA), which provides essential protections for borrowers:
- Interest Rate Caps: The NCA sets maximum interest rate limits to protect borrowers from excessive charges.
- Affordability Checks: Lenders must conduct affordability assessments to ensure you can repay the loan without undue financial strain.
- Transparent Terms and Conditions: Lenders are required to disclose all fees, rates, and terms upfront, helping you make informed decisions.
Alternatives to Personal Loans
What other financing options might suit your needs?
If a personal loan isn’t the best fit, consider these alternatives:
- Overdraft Facilities: For short-term needs, an overdraft can provide quick cash access at lower rates.
- Microloans: Smaller loan amounts with shorter terms may suit immediate, low-cost expenses.
- Peer-to-Peer Lending: Platforms like FunderJet offer an alternative to traditional lending, often with flexible terms based on personal arrangements.
How to Apply for a Personal Loan
A step-by-step guide to applying:
- Check Your Eligibility: Make sure you meet the basic criteria such as age, income, and residency.
- Gather Required Documents: Prepare your ID, proof of income, recent bank statements, and proof of residence.
- Compare Lenders: Use Fundrate to review rates, fees, and terms from different providers to find the best fit.
- Submit Your Application: Complete the online or in-branch application form accurately for faster processing.
- Receive Funds: Once approved, funds are typically disbursed within a few business days, helping you address your financial needs promptly.
FAQs
What is the typical interest rate for personal loans in South Africa?
Personal loan interest rates in South Africa typically range from 10.5% to 29.25%, depending on the lender and your credit profile.
How long does it take to get approved for a personal loan?
Approval times vary, but most lenders provide an outcome within 24 to 72 hours once all documents are submitted.
What documents do I need to apply for a personal loan?
You will usually need your South African ID, proof of income (e.g., payslips), and recent bank statements.
Can I qualify for a personal loan if I have bad credit?
Some lenders may approve loans for individuals with bad credit, but rates may be higher, or a credit check may result in a declined application.
Are there any additional fees associated with personal loans?
Yes, personal loans often include initiation fees and monthly administration fees, which vary by lender.
What is the maximum loan amount I can apply for?
The maximum amount varies by lender, but personal loans in South Africa typically range from R1,000 to R500,000.
How long can I take to repay a personal loan?
Repayment terms range from 6 months to 84 months, depending on the lender and loan amount.
Are there penalties for early repayment?
Some lenders charge an early settlement fee, while others allow early repayment without penalties. Check with your lender for specific terms.
Do I need collateral to qualify for a personal loan?
No, personal loans in South Africa are typically unsecured, meaning no collateral is required.
How do personal loan interest rates compare between banks and alternative lenders?
Banks generally offer lower interest rates for personal loans compared to alternative lenders, but alternative lenders may offer quicker approval and more flexible terms.
How we choose our best personal loan lenders
To select the best personal loans, Fundrate evaluates the most prominent lenders in South Africa. Each lender was ranked focusing on four main categories:
Affordability
This section of the scoring evaluates interest rates, penalties, and fees. Lower rates and fees, along with fewer penalties, contribute to a higher score. Lenders that offer rate discounts, grace periods, and the option to change the due date receive bonus points.
Availability
This category considers factors such as minimum loan amounts, number of repayment terms, eligibility requirements, the option to apply with a co-borrower or co-signer, and the loan turnaround time.
Customer experience
This category includes customer service hours, the availability of online applications, online account access, and mobile apps.
Transparency
For this factor, we assess how clearly information is presented to borrowers on the lender’s website. This includes details on credit requirements, rates, fees, and the availability of prequalification.