Payday loans: Not actually out to screw you

Category: Finance

South Africans need credit. According to the Momentum/UNISA South African Household Wealth Index 2015, only 8% of households locally budget. Bearing this in mind it shouldn’t be a surprise that SOUTH AFRICANS owe R1.63 trillion to financial institutions from a pool of 23,3 million credit active individuals. “WHAT! NO WAY!” scream the surprised parents of three, who thought they were the only ones in debt. Yes, South Africans are ambitious with their budgets. But this is to be expected with the financial challenges that many are currently navigating, and with so few having access to deposable capital (AKA: cash). If we pair the following issues with the fact that many take out a second loan to settle their first, the number of those truly over-indebted is currently estimated to be around 11 million. But what can the average inhabitant of Mzansi do? After all – who doesn’t want to have their cake and eat it – right? Well there are steps you can take to combat this problem and get a step ahead – with careful use of a payday loan. “WHAT?! BUT WE’RE ALREADY DROWNING IN MASSIVE DEBT!” shout the same couple as before, “And aren’t they dodgy?” Credit is a great financial tool if you manage it right. The problem locally is that the majority of those dealing with debt haven’t been taught the tools for managing it properly. The National Credit Regulator has struggled to teach the general public these tools. The first step is to ensure that you’re currently budgeting and setting aside extra each month so you can pay off your debt quickly and efficiently. Payday loans, instant loans, short term loans, are not meant to be taken out for long periods, they’re meant to help you with critical, unforeseen expenses so you can reach your next pay cheque – it’s in the name. If you’ve met this criteria, the next step is to research your various credit agreement options. But as we know handling a nine-to-five, with a number of children, and a pet, means that your bank-visiting-time is limited. And while there are online services that offer payday/instant/short-term loans, the number of them is staggering! Some might have higher repayment rates, or longer repayment periods, some just won’t offer you access to the lump sum you need, they still have small nugget you want? WHAT??? How can the average “SAFFA” ensure they’re taking out the right loan for them? After all it’s as personal as that birthmark under your left foot. Little Loans (littleloans.co.za) is an online service that will instantly route your loan application to multiple online lenders throughout the country. Fill out the 20 second form with your details and push “Instant Approval” – DONE!