Types of loans in South Africa – credit you may consider

At times it’s necessary to get a cash injection to meet certain personal needs and financial obligations. While avoiding falling into debt is a good thing, taking out a loan isn’t always a bad thing. Loans can be safe and acceptable ways of achieving some life goals.

Home Loans:
Also known as mortgages or home equity loans, these loans provide individuals with an opportunity to become home owners by paying off the debt over a number of years at a comfortable and steady pace. The loan is given by using the borrower’s newly bought home as collateral in the event that the borrower defaults on the repayment of the loan.

Student Loans:
Furthering one’s education can be quite an expensive investment. While not everyone may have the cash needed to pay for their studies, there are student loans to assist individuals in need of financial assistance. There are various types, each carrying its own terms and conditions. These loans are designed to help individuals pay for tuition fees, accommodation, textbooks and other education related costs. Benefits include lower interest rates and extended grace periods, giving borrowers an opportunity to pay the loan off after they have completed their studies.

Types of loans in South AfricaCredit Cards:
Not many people realise this, but credit cards are forms of loans. Having a credit card can be useful especially in cases of emergency. Credit cards can be a convenient and can offer effective payment methods. Like any other loan, credit cards are charged at a certain interest rate and instalments are due on a specific date every month.

Medical Loans:
Medical expenses can be financially crippling. Medical aids don’t always cover medical procedures. Nowadays there are financial institutions that arrange for medical bills to be paid and will deduct repayments monthly.

Small Business Loans:
Most businesses require start-up capital. Banks and other lenders offer funding to small businesses, often with favourable interest rates and repayment plans, compared to standard personal loans. Detailed business plans are usually required.

Vehicle Finance Loans:
Most people aren’t able to afford a car on their own early in life. Car loans provide a lump sum of money to finance purchases. This is a simple way of acquiring funds and they can be obtained from a variety of sources, such as car dealerships, banks, online companies and private sources.

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