Why Use Guaranteed Payday Loans in South African?

Why Use Guaranteed Payday Loans?

Payday loans have had mixed reviews, but the most important factor to consider with payday loans is if they can be useful or not. If you find a sudden need for extra money, then a guaranteed payday loan can be highly useful.

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Why Use a Payday Loan?

Can’t Get a Bank Loan

Financial problems and situations can happen to anyone and this will lead people to seek small bank loans or mortgage loan modifications so that they are able to pay mortgage payments. However, mortgage loan modifications are not the easiest to get and can take months to finalize.

Guaranteed payday loans, on the other hand, are available when you need it so that you are able to make your payments on time.

Paying an Emergency Medical and Car Expenses

Unexpected expenses whether it is medical costs or car repairs do happen and you may find it hard to pay for these. You are able to pay for these bills through the use of a payday loan.

money problems

This means that you are able to pay for emergency expenses when they happen. A payday loan can then be very useful during these times as long as you are able to pay the loan back.

Paying Credit Card Debt

If you have credit card debt, you are able to use a payday loan to clear this debt. This can help you to avoid further interest on the debt and also stop debt collection agencies knocking at your door. A payday loan is able to reduce the damage that has occurred from debt buildup.

There Isn’t a Credit Check

If you have no credit or bad credit then you will find it extremely difficult to get a loan from a bank, however, you are able to get a payday loan.

Payday loans do not need you to undergo a credit check. You are able to borrow the money you need even if you have bad credit so you are still able to pay for what you need to.

Also, the approval of a payday loan is very quick, you will have access to your money almost immediately.

Covering a Debt That Will Cost More

Missing a payment on a loan that you already have can result in large penalties or can lead to the repossession of an asset like your car. If this is the case, you may find that the interest paid on a payday loan works out to be less than the penalty you may face and it would then be a good idea to pay the debt you owe with a payday loan.

There are many reasons why you may take a guaranteed payday loan, but keep in mind that payday loans do have to be paid back within a short amount of time, so make sure that you are able to do this.

Wait… There are still a few things that you need to know…

The Good and the Bad

As with anything payday loans have pros and cons. Payday cash advances are short term loans that are ideal if you need to pay for an unexpected expense. Here is a look at the pros and cons.

The Good

  1. Qualification for a payday loan is easy as you will just need to verify your identity and income with pay slips and bank statements.

 

  1. You shouldn’t have any problems obtaining approval for a payday loan as long as you are able to prove that you have a regular income and have never defaulted on any other cash advances.

 

  1. With a payday loan, you are able to borrow small amounts of money. Generally, a payday loan lender will only allow you to borrow an amount that you are able to afford, which will never be more money than you make.

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  1. You are able to spend the money that you borrow on anything that you want. Payday loans do not have any restrictions on what you can use the money for.

 

  1. Your information is kept private and secure by the lending institution and they will not give your details to any other company or business.

 

  1. There are some payday loan lenders that are open 24/7 and you are able to apply online for a payday loan whenever you want and whenever you need it.

 

  1. You will not need to put up any collateral in order to obtain the loan.

 

The Bad

  1. The interest rates and fees can be quite high and you will need to be sure that you can afford these.
  1. With payday loans, you will need to be careful that you do not enter into a cycle of debt. This can happen where you take a payday loan, but take another to pay for the first payday loan and so on.
  1. Payday cash advances are not a long-term solution for financial difficulty and will only work in the short term. They should only be taken and used in an emergency.

Do you want to apply for a payday loan…have a look below…

Applying for a Payday Loan

If you want to get a guaranteed payday loan, then you are able to easily. You can apply for a payday loan online 24/7. You will need to fill out a form that asks for some personal details. You will need to verify your identity with the payday loan company and they will also ask for proof of income as well as bank statements. A payday loan lender will not check your credit score, so even if you have bad credit, you are still able to apply and receive approval for the loan.

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Many online payday loan lenders will have a calculator on their site, which will tell you the amount of money that you are able to borrow as well as the interest, which will be charged. This helps you to know the exact amount that you will owe by your next paycheck.

Online lenders will draw the money directly from your bank account once you have received your pay. You are able to extend the term for the payday loan so that you have more time to pay the loan back, but if you do this you will need to pay more interest which can make it harder to pay back.

Payday loans are short term loans that can help when you are facing a financial emergency and need access to funds quickly. You should only take a payday loan if you are sure you are able to pay it back with the interest by the time you receive your next paycheck.

What Happens If You Can’t Repay a Payday Loan in South African?

What Happens If You Can’t Repay a Payday Loan?

It can be scary when you realize you are not able to pay back any type of loan especially a payday loan. A payday loan does work a little differently to other loans though because they are short term loans that require no credit check.

paying a loan in South Africa

Here is what happens if you can’t repay a payday loan.

What Happens If You Can’t Repay a Payday Loan?

They Will Take an Electronic Draft

Most payday loan lenders will now obtain their repayment by automatically drafting or taking the money from the borrower’s bank account. This is the bank account that the borrower listed when then took the payday loan. If this draft fails or if there are not enough funds in the account, the payday loan lender will try a few more times. If they are still not able to get their money than they are able to draw from any of the other South African accounts that have been listed by the borrower.

They Will Start Calling

If the payday loan lender is not able to collect the repayment from you, they will begin to place collection calls to the numbers listed by the borrower. There are some lenders that will make several calls a day in the attempt to annoy the borrow into repaying.

They Will Report You

If after 30 days, the payday loan lender has still not received their payment, the lender will report the failure to pay to the South African credit bureaus. This will reflect negatively on your credit report and borrowers will find it difficult in the future to obtain other loans and credit. This failure to pay will stay on your credit report for 7 years.

They May Enlist a Collection Agency

If a payday loan lender is still not able to get their money, then they may hire the services of a collection agency. These collection agencies will usually use the same tactics as before like direct mail and frequent phone calls. Also, if the lender writes off the loan by sending it to the collection agency this is reported to the credit bureaus and this will damage your credit score even more.

They May Take Legal Action

If the amount that you owe is very high, then the lender may sue in order to recover payment. If the court action is successful, then the borrower’s wages might be garnished until both court and loan costs have been repaid.

Wait…You can do something…

What to Do If You Can’t Pay Back Your Loan

If you are struggling to pay your payday loan, then you shouldn’t ignore the problem as this will not make it go away. If you are having problems, then there are some steps you can take, which will help to alleviate the stress and get you on the right track.

financial problems

Contact Your Payday Lender

If you find that you are not able to pay your payday loan, then you must contact your lender as soon as possible. The lender needs to treat you fairly and give you reasonable time to repay the loan. They may freeze interest, suspend charges, stop recovery until a repayment plan is in place or accept smaller repayments.

All correspondence with the lender should be kept and recorded so that you are able to show you tried to make contact if they do not reply.

Consider Cancelling Recurring Payments

If you are not able to pay the loan or if paying the loan means you are not able to pay for essentials then you could consider contacting your bank and cancel the recurring payment, which allows the payday loan lender to take money from your account.

If you do this make sure that you have informed the lender of the action.

Keep a record of when you did this, because if they still able to take your money, you will need to lodge a complaint against your bank.

Do Not Roll Over Your Loan

The payday loan lender may suggest that you should roll over the loan for another month, but don’t do this. Rolling over the loan will mean you pay more for interest and other charges and you will end up owing more.

Rather seek debt advice and agree on a repayment plan.

Seek Help from A Free Debt Adviser

If you are struggling to pay your bills and are finding it hard to deal with the payday loan lender, then you should seek the help and advice of a free debt advisor.

A debt adviser will help you and will help to get your debts under control. They are also able to negotiate with the payday loan lender for you. If you are working with a debt advisor, then you should inform your payday loan lender immediately. The call you make to your payday loan lender should be followed by a letter to the lender.

financial help

Your lender will then have to give you a reasonable amount of time to sort out a repayment plan before they use a debt collection agency. If the payday loan lender, continues to contact you whilst you are still working with a debt advisor you should contact them asking them to stop.

Also, Remember

A payday loan lender should not put you under any pressure. They are not able to call you at work without your permission. They are not allowed to discuss your debt with family or your employer and they are not allowed to refuse to work with a debt advisor that you have hired.

You might be wondering…

How to Complain About a Payday Loan Lender

If you think that your payday loan lender has treated you unfairly or if you are not happy with the repayment plan that they have put forward to you, then you are able to complain. You should first complain to them.

Once you have a lodged a complaint with the payday loan lender, they have about eight weeks to resolve the issue. If they do not or if you feel that they have not addressed your complaint correctly, then you are able to complain to a financial ombudsman service.

The financial ombudsman is an independent service that deals with complaints about financial services and providers. If the judge finds that the payday loan lender has not resolved your complaint correctly and properly or finds that they have treated, you unfairly then they are able to order them to pay you compensation.

Payday loans can be a useful financial product especially in times of emergency, but you need to be sure you are able to repay the loan when it is due. If you are not able to repay your payday loan, then seek the help of a debt advisor as they will work with you to help you in your financial situation.

How to Get a Payday Loan Online in South Africa

How to Get a Payday Loan Online

Payday loans are short term loans that allow you to borrow money for a short period of time. The amount that you are able to borrow is usually a small amount, which will need to be repaid by your next paycheck.

Payday loans do have a bad reputation because they often charge a high-interest rate, but payday loans can be useful.

 

In the case of an emergency which is common in South Africa where you need to get access to cash quickly, payday loans are very useful and as long as you are able to pay the loan back with the interest, you won’t have any problems.

How Do Payday Loans Work?

Payday loans are pretty quick and you can actually have access to the loan in just a few minutes in some cases. As soon as the payday loan lender has confirmed your income and has checked your account information, you will be able to claim the loan.

If you are applying online, the loan will be deposited into your South African bank account. You will also need to give the payday loan permission to withdraw what you owe from your bank account when it is due.

In order to get a payday loan, you will need to have certain documentation in place so you are able to apply for a loan.

So what do you need…

What Do You Need to Get a Payday Loan?

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You Will Need ID

You will need to have a valid identification to take out a payday loan. You are able to use your driver’s license as a form of ID or any other government issued form of identification. There are some payday loan lenders that will require further identification documents like a household bill that states your name and residence.

Verifying Your Income

Payday loan lenders will want to check your income so that they are sure you will be able to afford the loan repayment. In the application process, you will need to verify your income.

This may require just recent pay stubs from the last couple of months. However, you will find some lenders that will need a recent bank statement or employment confirmation.

Depending on the lender, you may also need to provide tax documents for self-employment income for instance.

Do You Know Your Bank Information?

You will need to know your South African bank information when applying for a payday loan. This is because the lender will automatically withdraw payments from your checking account. You will need to have an active bank account if you want to get a payday loan.

The payday loan lender will need to have your account number and bank’s routing so they are able to withdraw your payment electronically.

If you are unsure of your banking information, you can call your bank to get the required information.

What Else Do You Need?

In order to take out a payday loan, you will need to be over the age of 18 years. Your age will be verified by your ID.

You will also need to supply your contact details like a working telephone number so that the lender is able to contact you.

The requirements will vary from lender to lender, so you will need to check what the lender you are using needs so you are able to take a payday loan.

Other Things to take into Consideration

You need to make sure that the company you are using is reputable. You need to do your research and make sure that the company is a licensed lender.

Payday loans do have high-interest rates and these rates need to be taken into account before you take a payday loan and you need to ensure that you will be able to afford the full repayment.

You might be wondering how to get a payday loan online…

How to Get a Payday Loan Online

Find a Legitimate South African Online Lender

The first thing that you will need to do is find a reputable and legitimate online lender that offers short-term loans or a payday loan.

You should take a look at the lender’s website and their policies. Always look and read the small print and see if there are any hidden fees. Also, have a look at the interest rate that they charge and calculate this with the amount you want to borrow to see if you can afford the loan.

There are some lenders that will list the full application on their website or you may find that you will have to fill out the application in stages.

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You should make sure that you are able to find reviews of the lender that you are considering. If you are not able to find any user reviews, take a look at a different lender.

Know What You Can Borrow

In order to make sure that the loan works in your favor, you need to know the right amount to borrow and ensure that you are able to pay the loan back. Payday loan lenders only allow you to borrow small amounts, but remember that you do not need to take the maximum you are able to borrow.

You should then only borrow what you need and create a budget that includes paying back the amount, any fees that are charged and the interest rate. This helps you determine if you are able to pay back the loan, because if you are not able to, you may incur high late fees.

Get Everything Ready

When you are ready to fill out your application, it is a good idea to have everything that you need next to you. Payday loan lenders will require your personal and financial information.

You will generally need to supply:

  • Bank account information
  • Contact information
  • Your ID number
  • Proof of employment and income

Fill out the application with all necessary information.

You will then need to wait for your application to be approved. There are some payday loan lenders that will confirm approval within just a few minutes. You will generally receive an email that confirms the approval.

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With online payday loan lenders, the loan is usually transferred into your bank account. When the payday loan repayment is due, the lender will take the money out of your bank account.

Payday loans do have their advantages and getting a payday loan online is simple, easy and convenient. They also require very little information to get one and you will not have to go through any credit checks, which means that if you don’t have any credit or if you have bad credit, you are still able to get a payday loan. Payday loans give you access to money that you need when you need and work well in times of emergency.

How Do Payday Loans Work in South Africa?

South Africa, How Do Payday Loans Work?

There are times in life when unexpected expenses crop up or income becomes unsteady and you may find that that you don’t have the money to pay for these. If you do not have a fully funded emergency fund, then you will need to take some type of loan to bridge this financial gap. South African Payday loans are an option, but they do come at a high price.

workings of payday loans in south africa

Payday loans are small short term loans that do have a high interest associated with them. Payday loans should be considered carefully because they can lead to debt that is hard to get out of.

How do Payday Loans Work?

If you are halfway through the month, but find you need some extra cash to pay for an unexpected expense like car repairs then you need to find a way to get the money to pay because without your car for instance, you won’t be able to get to work, which could risk your job.

With a payday loan, you are able to go to a payday loan lender where they will ask you to write a post-dated check for the amount of the loan plus fees. You are also able to apply for a payday loan online, which will require you to give the lender permission to take the money you owe from your bank account on the due date.

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You will usually have just a few weeks or until your next paycheck to pay back the loan.

The fee that they charge will include interest, which does make payday loans one of the most expensive loans to get. The interest rate for payday loans is higher than other types of loans because it is a short term loan and you are essentially paying for the privilege of having instant money when you need it for a short amount of time.

In order to take a payday loan, you will need to prove that you have a regular and stable income, this is so the payday lender can be sure you are able to pay the loan back.

However, many people find that they are not able to pay back a payday loan or have to take another one to cover the costs for the month once you have paid back the payday loan.

When your payday loan is due, you are able to pay your debt or can roll that debt into a new debt, which will add to the money that you owe, this can lead to a debt spiral.

You might be wondering if payday loans affect your credit…

The Effects of Payday Loans on Your Credit

When you apply for a payday loan whether it is in person or online, you will not be subjected to a credit check. As long as you pay the loan back on time, a payday loan will not appear on your credit report. This also means that a payday loan will not help your credit score or help in building your credit.

However, if you are not able to pay your payday loan then it could affect your credit. If the debt you owe a payday loan lender is taken to a debt collection agency, then the debt collector could report this to the credit reporting agencies. This will show as a negative entry on your credit report and will lower your credit score.

The Advantages and Disadvantages of Payday Loans

Payday loans can be useful in times of emergency and they do have advantages, but they also have disadvantages.

Advantages

  • In a financial emergency, payday loans are a fast source of cash.
  • You do not have to go through a credit check to get a payday loan.
  • You could save money by using a payday loan to cover overdrafts, credit card fees and bounced checks.
  • People with bad credit are able to qualify for a payday loan.

Disadvantages

  • The interest and fees associated with payday loans are high.
  • You are only able to borrow small amounts.
  • They could hurt your credit score.

Wait…there is more to know…

Top Reasons to Take a Payday Loan

If you have a stable South African job and a regular income, then you are able to take a payday loan. Here are the top reasons, people take SA payday loans.

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Avoiding Late Fees

Every month late fees can build up whether you are incurring late fees for unpaid credit card bills or overdue utilities. These late fees can sometimes cost more than the balance that you owe. A payday loan can be used to stop these late fees from occurring and will give you time to catch up on the money you owe.

No Credit Check Loans

Taking a loan at a traditional bank can be difficult because they have very strict qualification requirements. Payday loans are no credit check loans and your ability to take this loan is based on the income that you are earning. You are then able to get access to money that you need to pay debts before they affect your credit score to harshly.

Fast Approval

The process for applying for a payday loan is easy and often your payday loan will be approved within just a few hours. When you have a financial emergency, payday loans offer a way for you to get the money you need, when you need it.

Avoiding Eviction or Repossession

If you are overdue on car or rent payments, then it can lead to the repossession of the car or eviction from your home. These acts can occur quickly, but because you are able to get a payday loan quickly, you are able to avoid repossession or eviction. You are then able to use a payday loan to make car or rent payments on time.

South African Payday Loans Are Short Term Loans

Loans from banks usually require repayments over years and it can be stressful to take on such a long debt. Payday loans have a shorter term and are repaid by your next paycheck. You will then be able to take a loan and repay it quickly and not have the stress or take on the burden of a long debt.

You Don’t Need Collateral

As a borrower, you will not need to put up any collateral to secure the loan. A payday loan is secured against the fact you have a regular income.

Payday loans are useful and offer financial relief in times of emergency when you really need some extra money to tie you over, however, there are disadvantages. The major drawback is the high interest that is charged. You should then only take a payday loan if you are sure you are able to repay the loan on time, without it leading to other financial issues.