The nine types of loans available in South Africa

The nine types of loans available in South Africa. Image credit: AdobeStock

The nine types of loans available in South Africa

(Partner Content) There are different types of loans and countless lenders. Outlined below are the various types of loans in South Africa.

The nine types of loans available in South Africa

The nine types of loans available in South Africa. Image credit: AdobeStock

When we look at the challenges people face in the modern world, we realise most of them revolve around finances. A quick solution to a money problem is usually to borrow. Loans are repaid at different rates over different periods.


These are loans acquired directly from a creditor for one’s personal use. Personal loans are given on basis of your creditworthiness. One does not need to guarantee the security of the loan. They are paid back mostly through instalments as agreed between the creditor and the debtor.


With a secured loan, the person getting the loan has to put a personal asset up as security for the loan. This way should they default payment on the agreed date, the asset will be taken as collateral.


These are loans paid in small amounts over time until they are fully returned, mostly in monthly instalments.


These are mostly given by the government to finance education for students who are unable to pay comfortably up front. They are usually in large amounts and students are expected to clear them when they are done with their education, not as a lump sum of course but slowly over time, they might take several years to clear.


To acquire a house that they call their own, people get these loans in an amount they can pay comfortably over time. The repayment for these loans can be changed for the suitability of the debtor.


A company, mostly in its early stages can take a loan to finance operations until they can fund themselves. Business loans work the same as personal loans only that it is a whole business or company in debt, not an individual. They also have different rates and repayment periods.


50% of your pension is used as loan security in this case. One needs a certain amount in their pension or provident fund to get this loan-R7,000 and deductions are made on your salary monthly until it is repaid.


These loans are taken and repaid when the debtor is paid again as the name suggests. Usually, the payment is done at month-end with the agreed interest rate included. It’s important to compare payday loans as some are much more expensive than others.


This type of loan is mostly used in acquiring assets, particularly vehicles. Whenever one wants to acquire an asset, they can get this loan and payback in rates determined by the amount they took.


This is a loan used to cover unexpected costs. It is given by the bank at certain rates allowing one to get what they need even when their account balance is insufficient. The payment is done when money is deposited into the bank account.

A loan well managed will always solve financial problems with ease. Money affords life, if you can get it as a loan and pay later, you need to!