Cash Loans – South Africa
The Differences between Legitimate Lenders vs Loan Sharks
The business with cash loans in South Africa is growing as more and more people want to get a small amount of money to deal with financial emergencies quickly. There are many legitimate lenders that offer such products, which are often available directly online. At the same time, these are also available from loan sharks, which are illegal lenders trying to rob you of your money. Consider how the products of the two types of lenders differ from one another.
Loans from Legitimate Companies
The cash loans from lenders licensed by the National Credit Regulator of South Africa have interest rates up to a set maximum. This maximum is disclosed by the NCR. You can readily check it to confirm that you are dealing with a legitimate lender. The total cost of the loan is also regulated by this institution.
Licensed lenders are required to apply strict eligibility criteria to loan applicants. They must ensure that the applicant has sufficient disposable income to repay their loan. They will check whether the person has other loans to ensure their eligibility.
If the borrower cannot repay their debt, the legitimate lender will offer extension of the loan, debt consolidation or renegotiation of the terms and condition. If these solutions are not possible, they will turn to the court for resolution of the problem.
Products from Loan Sharks
The cash loans available from loan sharks are not regulated by the NCR. That is why these illegal lenders charge interest which is extremely high. They use other tricks to make their loans even more expensive. They charge interest daily. They set high fees. They make the repayment term very short so that the borrower is forced to ask for extension which comes with a super high penalty fee.
The loan eligibility requirements set by loan sharks are super low. They just make sure that you earn income or have property which can be sold for the purpose of repaying the debt. If you are unable to repay the loan, they may use threats and illegal means to force you to do give them all your money.
Always use cash loans from legitimate lenders.