Cash Loans

Cash Loans


Cash loans (or payday loans) are relatively small short-term loans with a high-interest rate. The name is derived from their purpose – to support someone through until their next payday. These loans are popular options for people who need cash urgently or people who have bad credit scores and struggle to get financial assistance.


How do cash loans work?
Getting a cash loan is simple and convenient. All you need to qualify is proof of employment and a bank account. Applications are often paperless, approval is instantaneous and repayment terms are easy. The money is paid directly into your bank account. Loan amounts can be anything from R100 to R8000. Normal practice is to repay the loan plus interest by payday, but more and more lenders will allow you to choose the repayment term – usually no more than 45 days.

Interest rates for cash loans in South Africa are much lower than, for example, the UK. Our legislature dictates that maximum to be charged on cash loans is 60% per year. In other words, lenders are only allowed to charge 5% interest on cash loans per month, or 0,17% per day, whereas in the UK lenders may charge up to 200%. Loan providers are also allowed to charge a set amount as a monthly administration fee, and a once-off initiation fee. Therefore it is wise not to take out a cash loan for more than 30 days. If the loan is not repaid on time, a penalty or legal fees could be imposed.

The successful repayment of the loan reflects positively on your credit record and will be beneficial should you decide to apply for a loan in the future.


When should you get a cash loan?

  • Only when you’re looking for a short-term loan.
  • Only if you are absolutely certain that you will be able to repay the full amount on the payment date.
  • When you’re good at managing your finances, have a comprehensive budget that you’re following, and pay all your bills ­­– but you have an unavoidable and unforeseen expense to deal with.
  • Although it is quite easy to get a cash loan, it is important to remember that they are expensive – costs can spiral out of control if you aren’t able to pay back the full amount on time. Before applying for a cash loan, seek advice about all available loan options.