Urgent Cash Loans – What You Need to Know

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Times are tough and budgets are tight. So what do you do when you’re suddenly hit with another expense? Starting from R100 to a maximum loan amount of R10 000, urgent cash loans offer South Africans quick access to a small loan that is to be repaid over a short period.  

Let’s delve deep into urgent cash loans, how to secure one, and how to borrow responsibly from urgent cash loan lenders.

What are Urgent Cash Loans?

Urgent cash loans are financial products designed to help people cover sudden emergency expenses or other unexpected expenses that they cannot afford. Sudden emergency expenses can range from anything like emergency medical expenses to vehicle repairs or needing to replace valuable electronics. 

Differing from traditional personal loans due to their shorter loan amounts and loan terms, urgent personal loans are often offered by smaller lenders. The loan terms range from two days to one year. The loan amounts range from R100 to R10 000, depending on the lender.

Many urgent cash loans do not have initiation fees or monthly service fees. Additionally, urgent cash loan lenders offer higher interest rates compared to traditional personal loans. The interest rates on urgent cash loans range from 3% to 6% monthly, while personal loans have interest rates ranging from 7,75% to 28,75% annually

Urgent cash loans can be known as many different loans by lenders. Let’s review some of the alternate names for urgent cash loans: 

How Can an Urgent Cash Loan Help?

Traditional personal loans typically require you to go through a long process of reviewing your credit history, affordability, and other factors. Urgent cash loan lenders still conduct affordability checks, but the process is much faster. 

Urgent cash loan lenders also offer smaller loan amounts compared to traditional personal loan lenders. These types of loans can also be used to cover your monthly expenses if you find yourself short on income. For example, if you do not earn as much as you anticipated for a particular month or your usual expenses suddenly increase. 

While traditional personal loans offered by banks have loan terms that range from one month to seven years, you may feel more comfortable knowing that your loan has been paid off within a few weeks. These types of loans also have higher interest rates and additional fees compared to traditional personal loans. 

Advantages and Disadvantages of Urgent Cash Loans

Advantages of urgent cash loans include:

  • Quick and easy application processes.
  • Many lenders payout by the end of the day.
  • The purpose of the loan is not as important in the application process. You enjoy flexibility in how the funds are used. 

Disadvantages of urgent cash loans include:

  • The cost of the loan is higher than traditional loans.
  • Many smaller lenders do not have physical branches. Therefore, communication is limited to telephone, email, or online messaging. 
  • Many smaller lenders also do not have provisions for long-term lending or larger loan amounts. 
  • Funding can be restricted depending on your income or whether you are a returning customer.

Eligibility Criteria

The eligibility criteria for urgent cash loans are less stringent than that of traditional personal loans. Lenders still need to be assured that you are not a high-risk client and will be able to repay your loan according to your contract.

Lenders will typically check if you can legally enter a contract in South Africa. Thereafter, you should be prepared to prove that you have stable employment, good credit history, and financial responsibility. 

You should have your South African identity document and recent payslips or letter proving your employment. You may also need recent bank statements to prove that you are generally financially responsible with your income. Your lender will then conduct a credit history check to determine your credit score and find out if you have any blemishes on your credit record.

Application Process

Many lenders offering urgent cash loans allow for easy online loan applications. This process is generally quick and comprehensive, so you should already know what you want and have your documents ready.

Of course, using an online platform like BetterLoans makes the application process much smoother and stress-free. We can help you get quotes on cash loans with all the information you need to make the most informed decision. You can compare interest rates, additional fees, and other terms and conditions with our online service. 

Responsible Borrowing

Given the high level of flexibility and less rigorous application process of urgent cash loans, you need to make sure you are being responsible. Urgent cash loans should not be taken out unnecessarily. This means you should evaluate your financial situation and savings and potentially ask close friends and family members to lend you the cash.

If you have decided that you do need an urgent cash loan to remedy your current financial dilemma, you should take the time to find the best deal for you. Only borrow the amount you need, and find the lender that offers the lowest interest rate and lower additional service fees.

You should also consider when you will be able to repay the loan. With loan terms ranging from two days to one year, you need to determine when you will have enough cash to repay the loan without jeopardising your finances. This time frame could be different for many people. For example, some people may be able to repay the loan by the end of the month, while others may need a few months before they are financially stable.

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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%.

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