Absa Loan Review
Absa Group Limited, a prominent financial institution, holds a listing on the Johannesburg Stock Exchange (JSE) and is one of Africa’s leading diversified financial services groups. With a notable presence in 15 countries across the African continent, Absa also maintains offices in the United Kingdom and the United States. The company has established an extensive network, operating nearly 1000 branches worldwide, with over 600 branches located within South Africa.
In this review, we will focus on three main offerings provided by Absa: personal loans, short-term loans, and consolidation loans. We aim to analyse and compare these offerings to provide insight into what Absa offers South Africans.
Absa Loans at a Glance
- Loan amount: R3 000 – R350 000 (personal and consolidation loans) / R1 500 – R8 000 (short-term loan)
- Loan term: 12 months – 84 months (personal or consolidation loan) / 1 month – 6 months (short-term loan)
- Interest rate: 13.75% – 28% (personal and consolidation loans) / 3% - 5% (short-term loans)
- Initiation Fee: Initiation Fee: up to 10% of the loan amount / R1 207.5
- Monthly Service Fee: R69
What You Should Know about Absa:
Absa is a well-known bank that has earned the trust of many South Africans who rely on it for their financial needs. This popularity can be attributed to the bank's diverse range of offerings, including personal, short-term, and consolidation loans.
These options cater to customers' individual needs, making Absa a popular choice for many. Additionally, the bank is committed to providing tailored financial solutions, further contributing to its widespread usage nationwide.
- Absa offers the benefit of reduced interest rates if you can secure a better rate from other banks, allowing you to save money on interest payments.
- Loans from Absa can be settled within a longer repayment period of 84 months, providing more time and flexibility to repay the loan.
- Higher loan amounts from Absa may come with higher interest rates, potentially increasing the overall cost of borrowing.
- If your credit history is unfavourable, you may not be approved for an Absa loan, which could limit your borrowing options.
- Even if your loan application is not approved, the process could still negatively impact your credit score, affecting your future creditworthiness even more.
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*Representative example: Estimated repayments of a loan of R30 000 over 36 months at a maximum interest rate, including fees of 27.5% APR would be R1 232.82 per month. BetterLoans is an online loan broker and not a lender. Our service is free, and we work with NCR-licensed lenders in South Africa. Interest rates charged by lenders can start as low as 20% APR, including an initiation and service fee determined by the lender. The interest rate offered depends on the applicant’s credit score and other factors at the lender’s discretion. Loan amount R500 – R350 000. Repayment terms can range from 3 – 72 months. The minimum APR is 5%, and the maximum APR is 60%.
How Absa Loans Stand Out?
Absa guarantees a lower interest rate than other lenders when you’re approved for a loan with them or another financial institution. This ensures that Absa will provide you with a more favourable interest rate than what its competitors offer. As a result, you’ll benefit from reduced monthly payments if you choose this option.
To be eligible for this offer, you can obtain a price claim guarantee either at an Absa branch or online. Within 30 days, you must submit a claim for the price claim guarantee and a pre-approval from a competitor. Moreover, the competitor’s loan must be available to all individuals nationwide in order to qualify.
Absa Loan Products
Personal Loans
Absa offers personal loans to suit individual needs, offering flexible repayment terms from 12 to 84 months and loan amounts up to R350 000. There is even greater convenience for current Absa customers with a minimum loan term of just 2 months. Absa offers personalised Annual Percentage Interest Rates (APR) to cater to each borrower’s unique financial situation. With rates starting at 13.75% and reaching 28% per annum, they aim to provide their customers with competitive and affordable personal loan choices.
Short-term Loans
Absa also offers short-term loan options to its customers. These loans are available in amounts ranging from R1 500 to R8 000. The initial interest rate for the short-term loans is 5% for the first payment. Afterwards, the interest rate decreases to 3% for each subsequent monthly payment. The repayment period for these short-term loans varies from 1 to 35 days, allowing borrowers flexibility in choosing a timeframe that suits their financial situation.
Consolidation Loans
The Absa Debt Consolidation Loan simplifies managing multiple loans by combining them into one. Borrow up to R350 000 based on your income and enjoy flexible repayment terms for up to 84 months. Absa offers competitive interest rates starting at 17.5%, helping you save money in the long run. Choose Absa for convenience, flexibility, and cost savings in your debt consolidation needs.
Benefits of Taking a Loan from Absa
There are several benefits to taking a loan from Absa. One advantage is that personal loans obtained from Absa can be consolidated with other existing Absa loans. This consolidation feature allows borrowers to streamline their financial obligations and simplify their repayment process by combining multiple loans into a single loan with a unified payment schedule.
In addition, Absa offers the added benefit of credit insurance for large loans. Absa includes credit insurance as a protective measure when taking out a significant loan. Credit insurance provides coverage and safeguards the borrower in case of unforeseen circumstances such as death, disability, critical illness, or retrenchment. This insurance ensures that the borrower’s credit obligations are met even if they face difficulties due to these unfortunate events.
Absa Loan Interest Rate and Fees
Short-term loans are a type of borrowing that comes with a specific set of terms and conditions. When you take out a short-term loan, the initial interest rate for the first payment is set at 5%. However, as you continue to make subsequent monthly payments, the interest rate decreases to 3% for each payment. This reduced interest rate applies to all the following monthly payments until the loan is fully repaid.
In addition to the interest charges, an initiation fee is associated with short-term loans. This fee can amount up to 10% of the loan amount and is typically added to the total amount borrowed.
Moving on to personal loans and consolidation loans, these are two other types of borrowing options. The interest rates for personal loans and consolidation loans can vary depending on several factors, but they typically start at 13.75% per annum. The interest rates for personal loans and consolidation loans can reach up to 28% per annum. Again, this rate depends on various factors, such as your creditworthiness and the loan terms. It’s important to note that the interest rate is annual, so the actual interest charged every month may be calculated differently.
Regardless of the type of loan you choose, whether it’s a short-term loan, personal loan, or consolidation loan, there is also a service fee of R69 associated with each loan. This fee covers the administrative costs and services provided by the lender.
How To Qualify For an Absa Loan
Whether you’re applying for a short-term loan, a personal loan over 12 months or more, or a smaller personal loan ranging from 2 to 6 months, here’s what you need to qualify:
- Valid South African ID: To begin your loan journey, ensure you have a valid South African ID document or Smart ID Card. This is a mandatory requirement for eligibility in South Africa.
- Age Requirement: You must be 18 years of age or older to qualify for an Absa loan. Remember to have your proof of age ready during the application process.
- Proof of Residential Address: Absa requires documentation to verify your residential address. Municipal bills, as well as cellphone statements, can serve as suitable proof. Make sure you have one of these documents handy.
- Proof of Income: To demonstrate your ability to repay the loan, you’ll need to provide your last three months’ payslips or bank statements. This will help Absa assess your minimum monthly income.
- Transactional Account: It’s essential to have a transactional account with Absa or any other bank that has been active for at least three months. This account will be used for loan disbursements and repayments.
- Regular Monthly Income: If you’re applying for a personal loan over 12 months or more, you must have a regular monthly income of at least R2 000. On the other hand, if you’re seeking a smaller personal loan ranging from 2 to 6 months, a regular monthly income of at least R1 500 is required. Ensure that your income is regularly deposited into your Absa transactional bank account, which will be verified during the application process.
By meeting these requirements you’ll be qualified for a personal or short-term loan from Absa bank.
How to Apply for an Absa Loan
The best way to apply for an Absa loan is to use BetterLoans. In addition to Absa, we request loan offers from other top lenders. You can easily compare and choose the best loan offer.
You have multiple options to apply for a personal, short-term, or consolidation loan. The most common is visiting any of the 600 Absa branches across the country. At the branch, you can speak to a representative who will provide you with the necessary application forms and guide you through the process. Fill out the application form accurately, ensuring that all the required information is provided. Along with the form, submit any required supporting documents, such as proof of income, identification, and bank statements.
Alternatively, if you are an existing Absa client, you can apply for an Absa loan through the online banking website. Log in to your Absa online banking account and navigate to the loan application section. Look for the loan options available to you and select the consolidation loan option. Provide all the required information as prompted and submit your application electronically. Absa will review your application and notify you of their decision.
If you prefer to apply over the phone, you can call 0860 100 372 and speak with a consultant. They will assist you with the application process and answer any questions you may have. Remember to ensure the accuracy of the information provided and meet the eligibility criteria set by Absa. Having all the necessary documents ready before applying can help expedite the process.
How Long It Takes Absa to Approve a Loan
Absa loan approval process typically takes only a few minutes; however, there are instances where the approval process may extend to a few business days. During such cases, it is advisable to exercise patience and understanding as Absa conducts a comprehensive background check to meet all necessary criteria.
Once the loan application is approved, borrowers can expect the funds to be deposited directly into their accounts within minutes, enabling them to access the financial support they require swiftly.
Is Absa a Trusted and Reliable Lender?
Absa was established in 1991 due to the merger between several financial service providers in South Africa, including United Bank, Allied Bank, Volkskas Bank Group, and specific interests of the Sage Group. Over the years, Absa has experienced significant growth and has become one of the largest banks in South Africa, operating more than 600 branches throughout the country.
Absa, being registered with the NCR (National Credit Regulator), operates in compliance with the regulations specified in the National Credit Act of 2005. This ensures the company upholds responsible lending practices and maintains transparency in its financial operations. The NCR’s oversight guarantees that Absa follows fair lending policies, provides accurate and comprehensive disclosure of credit terms, and protects consumers’ rights in all credit-related transactions.
With over 35,000 reviews on the popular South African consumer review website, HelloPeter.com, Absa has an average rating of 1.5 out of 5 stars. Many of the negative comments from customers primarily focus on complaints about the customer service provided by Absa.
Absa Contact Details
Office Address: 7th Floor, Absa Towers West. 15 Troye Street, Johannesburg, 2001
Open:Mondays – Fridays: 08:30 – 15:00. Saturdays: 09:00 – 15:00 (hours can differ per branch)
Email: [email protected]
Phone: 0860 100 372
Website: www.absa.co.za
Frequently Asked Questions (FAQs)
How long does an Absa loan take to reflect in my bank account?
The funds for your loan should reflect immediately after the loan has been approved.
How long does Absa take to approve a loan?
Absa typically takes a few minutes, however, the approval process can stretch to a few days.
Foli has an MSc. Economics degree, and has been active in South Africa lending space for years. Whenever he is not writing, you will find him building websites.
