Understanding how a personal loan can benefit you

You want to apply for a personal loan but have heard mixed opinions on whether this is a wise financial move. Sure, there are ways to get an instant loan quite easily but are you doing the right thing?

The first thing to consider is what you want to loan the money for and why you think a personal loan is the best option.

Do you understand what a personal loan is?

It is different to other loans, such as a car loan, home loan or student loan, because these types of loans are specific to what they will be used for. You can use a personal loan for just about anything.

10 common reasons people take out money loans:

  1. Further their studies.
  2. Home renovations.
  3. Pay for a funeral.
  4. Pay for a wedding.
  5. Finance a holiday.
  6. Buy a car.
  7. Start a business.
  8. Put their children through school or university.
  9. Manage an unexpected emergency, such as medical costs.
  10. Consolidate debt.

Any financial commitment, whether it is a store account, car financing or taking out a loan, requires careful consideration.

It is important to understand what you are signing up for.

When you get a loan, you are committing to pay the money back within a certain time frame and at a certain interest rate. If you understand each of these there should be no surprises on your journey with your bank.

Ultimately, what you want is a loan that suits your needs.

This means signing an agreement to borrow money that you can comfortably repay and which will not prevent you from meeting other important financial commitments, like your retirement annuity premiums.

A loan that suits your needs also means the service provider you choose offers you the fastest and most convenient way to secure the loan so that you can use it for what you intend to, at the lowest possible interest rate and a repayment agreement which suits you. 

If you are not happy with the final repayment figure rather borrow a smaller amount than commit to a repayment you cannot meet.

3 reasons personal loans are a popular choice:

  • They can be used for anything, even settling other debt.
  • The process is fast.
  • You can get short term loans.

At African Bank you get a lot more than you expect when you apply for a personal loan because:

  • You can apply online now.
  • We offer personal loans of up to R250 000 and if you qualify we deposit the loan amount straight into your bank account.
  • You determine the time frame in which you want to repay the loan – anywhere between seven to 72 months.
  • There are no surprises because it is a fixed repayment. You will know exactly what you will repay each month, which is very budget-friendly.
  • Existing customers can take advantage of our “Choose your Break” option which enables you to take a break from payment on qualifying loans.

When people want to borrow money, they usually need it quite urgently. If the process to apply and be approved is long and frustrating, you are dealing with the wrong service provider – move on!

Read more from African Bank on how to apply for and use a loan.

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