Do you find yourself short of some cash from time to time? Sadly, this happens to us all. Sometimes, unexpected expenses creep up in the middle of the month. Maybe your car broke down, or your geyser burst, or family expenses appear that you didn’t plan for.
Thank goodness for cash loans to receive funds directly and quickly into your account. Borrowed money that alleviate financial hardships or supplement unbudgeted emergencies. But it’s not just to get you out of difficulties, cash loans can also be used for home remodelling, home moving, or making a large purchase such as buying a car.
Builders Warehouse offers cash loans of up to R250 000 to finance everything you need for your home. You can apply online from the comfort of your home or while on the go from your smartphone. Funds get deposited directly into your account within 24 hours of approval. Which is comforting, due to needing the cash as soon as possible. But how do Builders Warehouse’s cash loans compare to other banks?
Here is a comparison when looking at loans to remodelling our house:
Builders Warehouse Cash Loan
You can borrow any amount from R1000 to R250 000 depending on what you plan to do, and how much you need to do it. The repayment terms can be anything from 12 to 60 months at fixed monthly installments. The application process is paperless, which makes it so much easier to apply, and even the statements are received via email or SMS. Customer protection insurance is involved to insure death cover, temporary and permanent disability, or loss of income. The client also gets the ability to re-advance the funds already paid after a period of time. Builders Warehouse promises a guaranteed never-exceeding maximum interest rate of 27.25%, as described by the National Credit Act.
Example: You borrow R7 500 and plan to repay over 24 months. The annual interest rate is 27.25%, the initiation fee is R936, and the monthly service fee is R69. This brings us to the total amount payable, which is R13 286. Every month’s installment would be R554 for 24 months.
So how do you get these funds? First of all, you must be 18 years or older, like with anything else in South Africa. You should have a valid South African ID or driver’s licence. You should be employed, obviously, because how would you repay the amount borrowed otherwise? With that being said, you should at least earn R2000 monthly, and supply proof of income documentation – payslip, paycheck, statement, etc. It’s probably best to familiarise yourself with the Ts and Cs too.
Absa Personal Loan
Absa promises loans to turn your dreams into reality. They offer a wide range of loans from express loans to personal loans of up to R350 000. We’ll focus on the big one for the purpose of this blog.
Again, you can either apply online or by visiting your nearest Absa branch. Any amount from R3 000 to R350 000 can be borrowed, over any period from 12 to 48 months. A personalised annual percentage interest rate (APR) is applied up to the maximum of prime +17,5%. For peace of mind and to be prepared for the unexpected, a credit protection plan from Absa Life Limited or any other licenced life insurer, can cover you in case of death, disability, critical illness or retrenchment.
Example: You borrow R7 500 and plan to repay over 24 months. The interest rate could be anything between, the initiation fee is R937.25, and the monthly service fee is R69. This brings us to the total amount payable, which is R11 098.41. Every month’s installment would be R531.43 for 24 months.
What you need: a bank account, a regular monthly income of at least R2000, a valid ID document or smart card, proof of residence and three month’s bank statements. Oh, and yes, of course, you need to be 18 years or older.
Nedbank Personal Loan
Nedbank offers personal loans as stepping stones to better your life. Loans are available from R2 000 to R300 000 with flexible repayment periods from 6 to 72 months. The monthly repayments will automatically be debited from your account at the best possible interest rates they can offer you. Also, an online application and the money will be deposited directly into your account when approved.
Example: You borrow R7 500 and plan to repay over 24 months. The interest rate could be between a minimum of 9.75% and a maximum of 27.25%. The initiation fee will be R937.25, and the monthly admin fee will be R69. The total amount payable could be anything between R11 129 and R13 034. Which means that every month’s installment could be between R463.69 and R543.09 for 24 months.
To apply you’ll need a South African ID or smart card, be employed and earn at least R3 500 per month, one month’s payslip with a letter of employment, the latest three stamped bank statements, as well as proof of residence.
FNB Personal Loan
FNB offers personal loans of up to R300 000 and you have the freedom to choose any repayment period between 1 to 60 months. The interest rate is personalised and could be as low as 13%. This loan protects you from interest hikes, guaranteeing a fixed monthly repayment amount at a fixed interest rate. Additional benefits to an FNB personal loan are that your eBucks Reward Level gets boosted, you can take a break in January when keeping up with your monthly repayments, a customer credit plan is included, and you won’t be charged extra if you settle your loan account early.
Example: You borrow R7 500 and plan to repay over 24 months. The interest rate could be a minimum of 13%. It’s not clear what the initiation and monthly service fees are, but we assume that it’s similar to the other banks. The total estimated amount payable would be R8 557.53, which means that every month’s installment would be an estimate of R365.56 for 24 months.
To qualify for an FNB loan, you should be between the ages of 18 and 64, be a permanent SA resident, be employed or self-employed, have a SA ID or smart card, provide a recent payslip, proof of residence, as well as bank statements.
Standard Bank Personal Loan
You can apply for a Standard Bank personal loan via internet banking or using their banking app, and instantly get a 2% discount on the interest rate, which could save you up to R407 monthly. With a fixed monthly repayment amount, you can feel comfortable with any amount up to R300 000 with an option of a repayment period between 12 to 72 months. It’s an easy online loan application with an annual percentage rate of prime +17%. When you have enough UCount Rewards, you have the option to cover the monthly installment with it.
Example: You borrow R7 500 and plan to repay over 24 months. The interest rate could be a minimum of 20.50%. The interest and fees would amount to R188. The total estimated amount payable would be R12 000, which means that every month’s installment would be an estimate of R500 for 24 months.
What you’ll need for a Standard Bank personal load is your SA ID number, proof of residence, one month’s payslip, and three month’s bank statements, if you don’t bank with them.
Capitec offers loans to help manage your financial life better. Any amount is available, ranging from R1 000 to R250 000 at any repayment period of 1 to 84 months. The monthly repayment installments are fixed at an interest rate from 12.9%. These loans come with affordable credit insurance, including retrenchment and death. Capitec offers an option to consolidate all existing loans for easier monthly repayments as well as easy management from their app.
Example: You borrow R7 500 and plan to repay over 24 months. The interest rate could be a minimum of 12.9%. It’s not clear what the initiation and monthly service fees are, but we assume that it’s similar to the other banks, or cheaper. The total estimated amount payable would be R8 549.08, which means that every month’s installment would be an estimate of R356.21 for 24 months.
Capitec’s requirements to apply for a personal loan are to be 18 years of age or older, have three month’s bank statements or payslips, proof of residence, as well as a SA ID number.
It seems that Builders Warehouse cash loans might be more in monthly repayments compared to the banks, but keep in mind that the annual interest rate is calculated at 27.25%. The option of re-advancement on the capital already paid is also an advantage the banks don’t offer. When applying for a cash or personal loan, make 100% sure about the interest rate applied, as it may be fixed or fluctuating, or personalised. The repayment period will also have an effect on the interest rate used.