The new buzz word in the micro credit markets is cheap loans. Questions still remain as to what are cheap loans. The word cheap implies that these loans cost less to get. The next question that usually arises that relates to cheap loans is where they can be procured. Are cheap loans affordable than personal loans or payday loans?
The word cheap can be sometimes be confused with low quality or retail outlets that sell something dubious. When it comes to loans the word association sticks to the concept. The article will try to undo some perceptions about cheap that is related to dark dingy places that offer loans.
What are cheap loans?
South Africa financial institutions are regulated by National Credit Regulator (NCR). Micro companies that offer loans usually have are accredited and recognized by NCR. The regulator has very strict rules when it comes to offering the South African public credit. Any credit lender must have loan approvals in accordance with the standards of NCR. Every cheap loan is assessed. Credit lenders in the nation have to be professional and have financial consultants that work within the respective credit provider. NCR has brought respect to the industry and loan sharks have been slowly forced out. Companies that offer cheap loans have to comply with the industry standards in operations, quality of service and open for scrutiny by the NCR. This has upped the level of proficiency. Cheap loans are offered under these standards.
Definition of cheap loans, it is an unsecured-personalized credit open to the public. Anyone can apply. The loans usually have low interest rates and most have a fixed interest rate. Cheap loans are based on the amount you can afford to pay it back. Cheap loans are quick to get. Most credit providers offer cheap loans online, for the sake of time and convenience.
Payday loans are NOT cheap loans
Payday loans are based on the concept of borrowing money now with the promise to pay it back on your next salary day. These type of loans usually have a very high interest rate in a short space of time. Risk is calculated into the loan application.
Applying for cheap loan
You will need to have a good credit profile to get a cheap loan. However there are some credit providers that offer cheap loans to blacklisted individuals. If you have a clean credit record some providers may offer you good rates.
There are few websites that help loan seekers compare rates and repayments. You can visit sites such as
Hippo.co.za and Loans.co.za. This will give you an idea of how much you will get and repayments.
Here’s a good example of cheap loan
Consolidations loans are the type of credit solutions to help you pay off all your debts at once and then focus your energy in paying off the borrowed money. You may have lots of different debts under your name, for example: vehicle, tuition fees, medical bills, credit card and other personal loans. All you do is ask your bank to help you consolidate these loans. This can save you money in the long run. You will not be paying interest on each debt, but only one account with interest
Always ask for the annual percentage rate (APR) of the loan. This may help you get a better interest rate on your consolidation loan.