Easter Credit - your Options
Can't even afford the chocolate eggs this Easter?
Justmoney talks you through the various forms of credit available to you...
While taking now and paying later is often the most dangerous thing you can do, there are times when buying on credit can be a lifeline to a consumer under pressure.
Justmoney never advocates you buying things on credit if you can't genuinely afford the repayments, and for those of you that can, it is important to remember that interest rate fluctuations and other surprises can make paying for things on credit more difficult than you had planned.
If however, you are in need of some respite in these trying times and are confident you can keep up to date with your repayments; here are a few options that are available to you:
1. Personal Loans
Personal loans are a very popular way of borrowing money because if you have all your personal information in order this is often the quickest way to get hold of some much needed cash. In some cases, you can have the money deposited into your account within 48 hours.
A personal loan could secure you up to R30 000 and in some cases as much as R50 000, but the amount you will qualify for depends on a number of factors so it is important to remember what it is that you need the loan for. If you only need R25 000, don't simply ask for the maximum amount and use the leftover cash as spending money - you are spending money you don't have.
Personal loans charge an interest rate that is dependent on your personal risk profile, which means that you could pay anything from around 20% to more than 40% interest on your loan, so make certain that you are borrowing this money for the right reason because it will cost you more in the long run.
Personal loan providers also charge a mandatory monthly fee in case you are suddenly unable to pay off your debt (For example, if you become incapacitated and are unable to earn an income). These will be based on the amount you borrow, so ensure that you know exactly what you will be paying every month if you were to take out a personal loan.
If you are confident that a personal loan is the right form of borrowing for your needs, why not apply for a personal loan through justmoney.co.za?
To apply for a personal loan today, click here!
2. Credit Cards
More and more South Africans are swapping plastic for cash these days and because some credit cards will offer you an interest free period (maximum around 55 days), it means that using a credit card can be a savvy way to shop if you pay off what you owe in full when you are required to do so.
If you aren't going to be able to pay off what you owe each month, make sure you use a credit card with a low debit interest rate and competitive fees because not all credit cards are created equal.
While some will offer you great rewards and the opportunity to get discounts on a range of products, others will simply focus on low interest charges and minimal fees.
Make sure that you know which kind of credit card will best suit your needs by checking out our credit card comparison tool.
To apply for a credit card, click here!
3. Home loans
Granted, this option only applies to those of you who are looking at purchasing a property, but it is a vital form of credit that vast numbers of South Africans will use in their lifetimes.
The current economic climate makes this a difficult option to qualify for, but if you are looking to purchase your home it is highly likely that you are going to make use of a home loan and so we have included a few things to keep in mind of you are thinking of applying for a home loan in the near future.
Banks are no longer prepared to lend you 100% of the value of your potential purchase, so if you want to buy a house you'll probably need a 20% deposit.
Your monthly repayments cannot be higher than 30% of your monthly income. This means if you earn R30 000/month you can only qualify for a home loan repayment of R10 000/month.
Each case is different and each bank is different. A ‘no' by one bank doesn't necessarily mean an outright no - make use of a broker or originator who has deals with all the lenders - then compare and see who will give you the best rate.
While we expect interest rates to come down steadily over the next few months, this is never a guarantee. If interest rate go up and you haven't budgeted for it, you might find yourself struggling to reach your debt commitments...
To apply for a home loan click here!