Loan Advantages And Disadvantages


While there are numerous positive aspects that come with qualifying for a loan, there are some negative aspects that one has to consider too. 

For Tiffany, who is expecting her first child with her husband Derek, applying for a loan is proving to be more stressful than she initially anticipated. The couple’s goal to extend their home before the arrival of their baby is something that they have had to get assistance with. When comparing loan advantages and disadvantages, they must be cognizant of specific needs. 


You get financial relief – You have the financial means to meet your needs. 

It can be paid off at a later stage, so you don’t need to stress about repaying it immediately. 

Amounts offered range from R500 to R150 000. For Tiffany and Derek, the amount should be enough to cover the exact needs of their renovations. 

There are different types of loans which can be applied for. 

The waiting period for accessing the loan may not be too long, depending on the type applied for. 

You can pay your debts off faster, with access to the cash. 

You can consolidate debts. 

Interest rates may be low if you get a secured loan. 


  • Fees may be high, depending on your credit score and level of affordability 
  • Interest rates may be high if you have a poor credit score 
  • The loan amount may be high if the loan term is long 
  • Criteria may be strict 
  • Approval may be dependent on credit score 
  • Approval may lead to over-indebtedness 

The various loan advantages and disadvantages are essential to consider before applying for any loan.


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