Revolving loans in South Africa
Often times when people are in a difficult financial situation, they are turning to loans to help them clear their debt or just to make the financial burden a little less.
Of course, there are various types of online loans that you can consider like long-term, short-term loans, debt consolidation, etc…
But there is one more type of loan that people often forget about or just have never heard of, it is called a Revolving loan. So let’s start this article by taking a look at what exactly a revolving loan is.
What is a Revolving loan?
A revolving loan can be described as a loan that has a fixed monthly repayment.
The interest rate that you would be paying will of course varies depending on what your credit score is, as well as your affordability.
So by now, you are probably thinking to yourself that this sounds just like any other personal loan you would take out, right?
What exactly makes this revolving loan different from the others?
Well, the difference and very big advantage is the fact that a revolving loan allows you to borrow the money again up to your original loan amount, but this can only happen once 15% of the loan has been repaid.
That doesn’t sound too bad right?
And you can also repay more into the loan at any time, meaning of course that if you have some extra money you can use it to pay off the loan faster, which would make the money available again should you need to use it.
Another great thing about revolving loans is that there is also debt protection available on these loans, should you want to make use of it.
If you are wondering what exactly debt protection is; it's there to help you repay your debt, in the event of temporary or permanent disability, retrenchment and even death.
So be sure to look at the option of debt protection if you are considering getting a revolving loan.
Revolving loans are available at most of the major banks, like FNB, Absa and even at Woolworths Financial Services.
So let’s take a quick closer look at the loan information that is available at the branches mentioned above.
FNB Revolving Loan
- The loan amount available: R6,000 – No Maximum
- Payment Terms: Unlimited (you can access your money once 15% of the loan has been repaid)
- Monthly Service Fee: R40 (only payable if you make use of the revolving loan facility)
- When do you qualify: You must have an FNB Personal Cheque Account.
ABSA Revolving Loan
- The loan amount available: R15,000 up to 3 times your gross monthly salary. Maximum is R150,000
- Payment Terms: There is no maximum repayment period, as long as a minimum of 2.5% of the loan amount is repaid each month.
- Monthly Service Fee: This may vary depending on your loan amount.
(But there is also a once-off initiation fee payable)
- When do you qualify:
–Must be an ABSA Customer with an account older than 6 months.
–Earn a gross monthly income of at least R8, 000
–Must be a South African citizen
–Have a valid green ID Book
–Be older than 18 years.
Woolworths Revolving Loan
- Loan amount available: R1,000 – R75,000
- Payment Terms: 12, 24, 36, 48, 60 months
- Monthly Service Fee: R26 (There is an initiation fee of R350)
- When do you qualify:
–Must be over 18 years old.
–Have a valid SA ID Book
–Have an active bank account
–Be permanently employed and earn at least R2,000 per month
So as you can see from the information above, it is not difficult at all to apply for a loan.
And it might just come in handy when you really need some extra money.