Payday Loan In South Africa- Are They Good?

Payday Loan In South Africa- Are They Good?

Sep 29, 2022

Payday loans are the only option left for South Africans who need quick cash to overcome their expenses for a short time. You must have experienced facing loan rejections many times with banks or other traditional lending institutions.

Do you know why they don’t grant you the loan approval in South Africa? There are various reasons behind that. One of them is your bad credit score, which shows how serious you are about making your loan payments.

Apart from that, if you go systematically, such loans are a great option during your hard financial times. Yes, this is a bit pinching that these funds come with high-interest rates because you want a quick solution to your financial problems by availing yourself as soon as possible.

That’s why you have to pay them back with high-interest rates. You can get instant approval after applying, which is surprising because it can’t be possible with banks in South Africa. There are some direct lenders to help you further. You only have to make the right decision here for choosing.

What is set definition of payday loans?

First, you must remember that there is no set definition of payday loans since such funds are for a limited period of 7 to 14 days. These types of loans make you able to cover up strewn expenses like paying medical bills, educational fees, auto repairs, and paying for rent. Such types of expenses are immediate expenses that disturb you get your next paycheck.

You can apply for the loan amount that varies from lender to lender. Still, the loan amount you can avail of is R100 up to R5,000 with direct lenders only because they take you through a short application process. It would help if you made sure to pay back your loan on time which many people often fail. With the help of payday loans, you can manage them in times of cash shortage.

Are payday loans risky in South Africa?

Due to not having a stable income with you, lending institutions find it risky to offer you payday loans. Applying for these loans with less or no income can- interest rates that you have to pay essentially during the loan repayment.

It can also be a bit problematic if some pending debts are going on- you may not be able to get the funds first. Secondly, some exorbitant fees and other charges will be associated with the loans.

In such a scenario, you will have difficulties paying off your loans on time. Once you find yourself unable to repay your loan on time, a cycle of debt begins, leading to bad ahead.

What are my alternatives to payday loans?

Perhaps, you may not know that some alternatives to payday loans can also avail you of instant money when you need it. Applying for these types of loans often doesn’t work for traditional banks.

Then people wish if they have some alternatives to such loans which are appearing proper for you now. Some additional options can get you the money without dealing with a long queue and signing several documents.

Some other ways to arrange money for you:

  • Ask someone else for money: You may have friends whom you have known very well for so long. You can directly approach them and convey the current problems requesting to help you with money. It is the best way of arranging money without taking out a loan bearing interest rate. Once you have cleared the purpose, it’s time to repay their money without making them ask for it. If you fail to do so, your relationship of many years will spoil.
  • Use emergency funds: You must have been saving money for this day of the emergency. It’s time to take that into use without walking out for loans to meet your short-term needs that have come from expenses. That’s why people accumulate money in a corner out of their earnings, so they don’t have to beg for money whenever they need it. It is a great idea to take this easy step toward ending this type of financial issue.
  • Take out cash from a credit card:This is also a fantastic idea taking out cash from your credit card. It would help if you kept the credit utilization at its minimal level to avoid paying a hefty fee and interest charges. But it would help to consider this option a last resort when nothing works for you. You must go to your nearest ATMs and get the cash using your credit card. It is one of the very costly ways for a particular time.
  • Ask for an advance from your employer if possible:The Company you are working for, and it’s been many years since you never had such a situation where you need some extra funds. But this time, you have become a victim of emergencies. What you can do is- ask for some advance. There is a strong possibility that you can get money from your company. You need to speak with your boss about it and explain the situation.

How much do payday loans cost after applying?

Now it depends on with whom you have applied for the funds. Payday loan cost depends on state-to-state law because every lender has different terms and conditions. The cost depends on them overall, but this is a fact that these kinds of loans are costly and have interest rates from R10 to R30 for taking out R100.

You can’t ignore that such financial assistance is unaffordable for many borrowers. But the best thing is- when all lending institutions have refused to fund you. It is where payday loans come in to get you out of financial crises. The fee of R15 is very common for a loan amount of R100.

Can I apply for payday loans with my bad credit or no credit?

Your credit score, either good or bad- is the reflection of your paying habits. In case of a bad credit score, lending institutions hesitate to help you because they know they may not get their money back after releasing it.

There is only one reason behind it- your poor FICO score. It makes them skeptical about assisting you financially ahead. But some direct lenders don’t make your bad credit an issue to assist you. They can even help you with payday loans without credit check too. 


You may not get any other quick solution to your emergencies simultaneously. That’s why applying for payday loans is one of the easiest ways to arrange money in less time. You can get the loan approval in 5 to 10 minutes and receive the funds in a couple of hours on the same day.

It can be accessible even more when you apply for loans from direct reputable lenders like us. We have some direct lenders who will work with you even with your bad credit or no credit.

About Author

Micah Sedres

Contributing Writer, Staff Content Editor
MoneyStar expert Micah strives to navigate finance niches like credit cards, loans, and mortgages easily. She helps hundreds of readers in credit building and provides money management tips. After regularly working for brands like, she joined the team as a staff writer to develop credit product reviews and comprehensive guides mainly focused on credit scores and loan/card offers.