Comparing some of the best Personal Loans providers in South Africa

Life in South Africa is expensive, no matter who you are. Daily costs keep climbing, and most of us are just trying to stay afloat. Then something extra hits and you need cash you don’t have right now. That’s often when people turn to personal loans.

There are a number of reasons you would look at getting a Personal Loan:

1. An emergency, medical or otherwise: Those moments when you freeze and think, “OK, how am I meant to pay for that? ”. 2. A planned “big cost” like fixing the roof on your house or a renovation. There’s always that one thing that keeps bothering you. 3. Needing money between jobs to bridge the gap until you start a new one, or fixing short-term cash flow for your small business. 4. Debt consolidation loan. If your debt reminders are constant, you can roll them into one personal loan and try for a better interest rate. 5. For a big, once-in-a-lifetime event like a family reunion, wedding or funeral when reality overtakes the saving you planned to do.

Personal Loans in South Africa explained

Unsecured loans

An unsecured loan isn’t secured against an asset like a house or a car. Approval is based on your credit score, income and affordability. Lenders want to know how likely you are to repay over the agreed term.

Personal loans can range from R1000 up to R350 000 (sometimes more). Repayments are monthly, over an agreed period, at a pre-agreed interest rate (which can vary).

Remember you will be paying back the original amount PLUS the interest.

Secured loans

A secured loan is when you borrow money and use an asset like your car or property as collateral. The asset secures the loan until you’ve paid it off, and you can keep using it while you repay. If you don’t repay, the lender may start a process to recover the asset (especially if there’s no credit protection in place).

Your credit score and why it matters

Your credit score is a track record of your repayment history. Late or missed payments will negatively affect your score. A good repayment history bumps it up, which makes approval more likely.

Get your credit score through ClearScore’s website.

How interest rates are calculated

Personal loan interest rates are priced around risk. If a lender thinks you’re more likely to repay (based on your credit history, income and affordability), you’ll usually get a better rate. The loan term also matters; longer terms can mean more interest paid overall, even if the monthly repayment looks lower.

Below is a breakdown of Hippo’s partners’ general interest rates when it comes to Personal Loans.

Debt consolidation with Personal Loans

If you have multiple debts, consolidating them with one Personal Loan often makes sense. You then have one monthly repayment at a (potentially) better rate, making it easier and simpler to manage. Consolidating your debt through a personal loan only helps if the new repayment is more affordable than the rest of the accumulated debt, so do some maths before you commit to avoid running up “new” debt. If you have bad credit in South Africa, most lenders will decline a personal loan because your credit record suggests a higher risk of missed payments. If the numbers show you are already under financial strain, the National Credit Act requires lenders to avoid granting credit that would be unaffordable to you. Debt counselling is becoming more prevalent as an option in SA. It’s a formal process under the National Credit Act that helps consumers who are in too much debt restructure their debts into a more manageable repayment plan. A registered debt counsellor assesses your finances, negotiates reduced instalments with creditors, and submits a repayment plan for approval.

With Hippo, you’re not alone with Personal Loans.

Before you commit to a Personal Loan, compare quotes with Hippo first and look at these Frequently Asked Questions about Personal Loans. Whatever you decide, use hippo.co.za to accurately compare which type of loan, amount, interest and period for repayment suits you best in minutes. You already have financial pressure; let Hippo help with one less thing to stress about. 

This article is for informational purposes only and does not constitute financial, legal, medical or insurance advice. Hippo is a comparison site helping you evaluate quotes from trusted South African insurers. Always review policy details before making changes. Quotes are risk profile dependent and subject to annual review. No fees are charged for using Hippo’s comparison service. HAS (Pty) Ltd and HCS (Pty) Ltd are authorised FSPs. Terms and conditions apply.