- Is it possible to obtain online loans for bad credit in South Africa?
- Top bad credit loans: By the statistics
- Other Bad Credit Loans People South Africa
- What is considered a bad credit score in South Africa?
- Am I eligible for the top bad credit loans in South Africa?
- How to obtain the best online bad credit loan in South Africa:
- How to compare the best bad credit loans in South Africa
- Types of loans for bad credit
- Bad Credit Personal Loans
- Frequently asked questions
In This Guide
Get quick approval and funding for bad credit loans in South Africa. Apply online now to access the best loan options tailored for individuals with poor credit history.
Having poor credit shouldn’t hinder people from accessing financing. Moreover, obtaining a new loan can be a means to reconstruct your credit history. However, it’s important to note that bad credit loans come with higher interest rates. If you’re seeking financial assistance, this guide highlights some of the top options for loans for bad credit instant approval available in South Africa.
Is it possible to obtain online loans for bad credit in South Africa?
Yes, people with poor credit can seek financial assistance from alternative lenders. Many alternative lenders in South Africa provide online loan services tailored to those with less-than-ideal credit scores. These loans come in diverse forms regarding amounts, terms, interest rates, fees, and eligibility criteria and so compare your options before applying.
Best loans for bad credit in South Africa 2024
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Pros
Cons
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Wonga works with over 50 verified lenders
Pros
Easy application
Instant deposits
No collateral required
Short term
Cons
High rates for bad credit
Limited to its network
Lack of online quotes available
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Customer Satisfaction Awards 2023
Pros
No credit check
Quick application process
Funding available on the same day
Cons
High interest rates and fees
Insufficient information provided regarding brokerage fees
LIME
Score:
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Personal loans and lines of credit for bad credit
Pros
Easy to get
No credit check
Cons
High rates
Extra fees
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Pros
Cons
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Completed within 24 to 48 hours
Pros
Mobile friendly
No penalties
Bank-level security
Cons
Higher rates applicable
Negative MPOWA reviews found
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Quick application process and free prepayment
Pros
Simple online application
Positive customer reviews
No prepayment penalties
Cons
Rates from and up
Undisclosed fees
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24/7 online customer support
Pros
Make payments weekly
Easily make extra payments
Cons
Must be employed
Minimum income required
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Pros
Cons
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Best Personal Loan Search Platform
Pros
Get funds deposited in as little as 24 hours
Accepts various types of credit and more
Cons
Requires proof of six months of employment (if applicable)
May charge a administration fee
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260+ billion in funded loans
Pros
Easy online application
Flexible loan amounts
Cons
High interest rate for bad credit
Risk of losing your home
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86.55% in the Overall Customer Satisfaction
Pros
No credit check
Lower APRs
No paperwork required
Cons
Three months to repay
Not improve your credit score
Government assistance not accept
FocusMoney: Personal Loan Consumer Satisfaction Awards
In 2024, we conducted the Focus Money: Personal Loan Consumer Satisfaction Awards, an annual assessment of personal loan in South Africa, offer by customer satisfaction feedback. Learn more about these awards and the methodology employed to identify the top personal loan providers based on customer service ratings.
Top bad credit loans: By the statistics
| Loan provider | Interest rate | Loan amount | Loan term | Key features |
| Wonga Africa | 3 to 5% per month | New customers up to R4,000 Existing customers up to R8,000 | New customers over 2 months (minimum) up to 3 months Existing customers over 3 months (minimum) up to 6 months. | Loan search platform offering pre-approval within hour |
| FASTA | starting interest rate is3% per month. | Borrow betweenR800 and R8,000 | loan overup to 3 monthsinfixed monthly installments | Quick application, same-day funding |
| LIME | 4 to 5% per month | R 500- R 8000 | Period 37 days | No credit check, funding in 24 hours |
| MPOWA FINANCE | 5% per month (0.17% per day) or 60% annually. | R100 and R8,000 | Period 30 days | Instant decisions, funding in 15 minutes |
| FINCHOICE | 24 month loan of R18,000 might incur an interest rate of 23% | R1,000 to R40,000 | 6 month- 24 months loan | Approval in 30 minutes, flexible eligibility requirements |
| BOODLE | 0.17%, translating to roughly a60% annual percentage rate (APR) | R100 to R6,000 | Up to 36 months | Instant decisions, offers personal and payday loans |
| Hippo | 27,25% interest rate | Loan amounts up to R350,000 | 6 Years | Secured and unsecured loans, high approval rate |
| My Mulan | 3 to 5% per month | New customers can apply for up toR4000 andExisting customers up toR8000 | 1 to 3 months | No credit check, funding in 24 hours, short-term |
Other Bad Credit Loans People South Africa
If you can’t find a bad credit personal loan for your needs, there are other online options to consider.
| Loan | How it works | How it compares to bad credit loans guaranteed approval | |
| Payday loan | Borrow up to R 4000 and repay by your next day | Faster, easier to qualify, much more expensive | Read More |
| Mini Cash app | Borrow up to R 500 and repay by your next payday | Offers smaller loan amounts, Often does not require a credit check, Requires payment of a fee for express service | Read More |
| Line of Credit | Borrow up to a specified limit | Pay interest on the borrowed amount, Repay the balance at any time, Stricter qualification criteria, Open loan term necessitates discipline in managing repayments and expenses. | Read More |
| Cash-Secured Credit Card | Functions similarly to a regular credit card | Requires a cash deposit as collateral, Offers lower interest rates, Cash collateral is necessary | Read More |
What is considered a bad credit score in South Africa?
In South Africa, a credit score is generally considered bad if it falls between 300 and 579. Here’s a breakdown of the credit score ranges:
| Credit score range | |
| Excellent | 767 – 999 |
| Good | 681 – 766 |
| Favourable | 614 – 680 |
| Average | 583 – 613 |
| Below Average | 527 – 582 |
| Unfavourable | 487 – 526 |
Therefore, a score between 300 and 579 puts you in the “Poor” category, indicating challenges accessing credit at favorable terms. This typically arises from factors like:
- Multiple defaults on different credit products
- Late payments or missed installments
- Bankruptcy or administration orders
- Limited or no credit history
Having a bad credit score can significantly impact your financial life, potentially leading to:
- Higher interest rates on loans and credit cards
- Difficulty getting approved for new credit
- Lower insurance premiums
- Problems renting an apartment
However, it’s important to remember that your credit score is not fixed. You can take steps to improve it over time, such as:
- Making all your payments on time and in full
- Paying down existing debt
- Checking your credit report regularly for errors and disputing them if necessary
- Using credit responsibly and sparingly
- Considering rebuilding your credit with secured credit cards or store cards
Am I eligible for the top bad credit loans in South Africa?
Before applying for bad credit loan, it’s essential to review the lender’s eligibility criteria to streamline the process and avoid wasting time. Here are the important eligibility requirements you may meeting for personal loans:
- Be at least 18 years old or the age of majority in your province
- Be a Canadian citizen or resident
- Meet the minimum income or employment criteria
- Fulfill minimum credit score requirements, if applicable
- Maintain an active bank account
How to obtain the best online bad credit loan in South Africa:
- Compare lenders: Evaluate various lenders based on factors such as annual percentage rates (APRs), fees, loan amounts, terms, and eligibility criteria.
- Apply to top choices: Select the most suitable bad credit loans and complete the online application process. Provide personal information including name, contact details, housing situation, and employment status.
- Select the best offer: Choose the loan option that aligns best with financial terms. Chosen lender request additional information or documentation.
- Get approved: The lender will verify income and identity, and approve the loan if all requirements are met.
- Submit the contract: Carefully review the loan contract before signing. Once signed, submit the contract and receive your funds either on the same day or the following day.
How to compare the best bad credit loans in South Africa
To compare the best bad credit personal loans in Canada, follow these steps:
- APR (Annual Percentage Rate): Compare the APR offered by different lenders. This includes both the interest rate and any additional fees associated with the loan.
- Extra fees: Take note of any extra fees charged by the lenders, such as origination fees, late payment fees, or prepayment penalties.
- Loan amounts: Consider the range of loan amounts offered by each lender. Ensure that the loan amount meets your financial needs.
- Loan terms: Evaluate the loan terms, including the repayment period and any flexibility in repayment options provided by the lender.
- Eligibility requirements: Review the eligibility criteria set lender. This may include factors such as minimum credit score, income requirements, and citizenship or residency status.
- Reputation: Research the reputation of each lender reading reviews and testimonials from other borrowers. Look for feedback on customer service, transparency, and overall satisfaction.
- Improves credit score: Some lenders offer options that can help improve credit score over time. Consider whether the lender reports timely payments to credit bureaus, which can positively impact credit history.
Types of loans for bad credit
Types of loans available for people with bad credit include:
Bad Credit Personal Loans
These are unsecured loans for people with poor credit scores. They come with higher interest rates and stricter eligibility criteria.
Payday Loans
Short-term loans that provide quick cash, usually to be repaid by the borrower’s next paycheck. Payday loans often have high interest rates and fees.
Secured Loans
Loans that require collateral, such as a car or property, to secure the loan. Secured loans be easier to qualify for with bad credit but carry the risk of losing the collateral if the borrower defaults.
Installment Loans
Loans that are repaid over a set period in equal installments. These loans may be available to people with bad credit but often come with higher interest rates.
Cash Advances
Short-term loans obtained through credit cards or payday loan apps, allowing borrowers to withdraw cash against their credit limit. Cash advances usually come with high fees and interest rates.
Peer-to-Peer Loans
Loans obtained from individuals or investors through online platforms. These loans have more flexible terms and eligibility requirements compared to traditional lenders.
Frequently asked questions
Can I borrow money with very bad credit?
Yes, it is possible to borrow money with very bad credit, but it may be more challenging and come with higher costs. Some lenders specialize in offering loans to people with poor credit scores, although they often charge higher interest rates to mitigate the risk.
Can I get a loan with 400 credit score?
Yes, it is possible to get a loan with a 400 credit score, but it can be challenging. With such a low credit score, limited to lenders who arrange loans to people with poor credit or alternative lending options.
Which type of loan does not require a credit check?
Payday loans are small, short-term loans that you can repay on your next payday, within 2 to 4 weeks. These loans do not require a credit check and are designed to offer instant cash to tide you over until your next paycheck.
Can I get a personal loan with no credit check?
Yes, it is possible to get a personal loan with no credit history. There are several options available for people without established credit:
Secured Personal Loans: Some lenders offer secured personal loans, which require collateral such as a savings account, vehicle, or valuable asset to secure the loan. Since the loan is backed by collateral, lenders may be more willing to extend credit to individuals with no credit history.
Co-Signer Loans: You may qualify for a personal loan by having a co-signer with a strong credit history co-sign the loan application. The co-signer assumes responsibility for repaying the loan if you default, which can help mitigate the lender’s risk.
Credit Builder Loans: Some financial institutions offer credit builder loans specifically designed to help people establish or improve their credit history. With these loans, the borrowed funds are held in a savings account or certificate of deposit (CD) and released to you once the loan is repaid in full.
Payday Alternative Loans (PALs): Offered by some credit unions, PALs are short-term loans designed to provide small-dollar amounts to borrowers with limited or no credit history. These loans often have lower interest rates and fees compared to traditional payday loans.
Online Lenders: Some online lenders specialize in providing personal loans to people with no credit history or less-than-perfect credit. These lenders may use alternative data sources, such as employment history or bank account activity, to assess creditworthiness.
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