Many people turn to credit agencies and loan providers to help get a cash boost when times are tight, whether this is to fund an immediate or unexpected bill, or to help consolidate existing debt.
However, across South Africa, more people are turning to loan sharks – known as a mashonisa, to gain access to cash fast. These are unregulated lenders and are very common across communities in South Africa.
According to Maya on Money, a popular South African website offering advice and news, The National Credit Regulator (NCR) has been working with the South African Police Service (SAPS) to target these loan sharks, who are using abusive methods to collect outstanding debts. This is a growing problem across the country, and one that doesn’t look likely to go away. So, why would people turn to these lenders, rather than choose online, reputable lenders, which are regulated, safe and apparently ‘easy’ to use?
Many reports state that members of the public like the ease of being able to walk to a loan shark’s house and get the cash there and then. Although this does seem appealing, online cash loans through regulated suppliers are also quick – sometimes, after a credit check, the money is in your account within just a couple of days.
When it comes to it being an ‘easy’ application, online lenders have streamlined their processes to make it as quick and easy as possible for people needing cash quickly. Their websites are open 24/7 for whenever you have time to apply. For instance, with Wonga, there online loan application incorporates four easy steps. These are indicative of many online lenders, and consist of:
Step 1: Decide how much money you need and when you want to repay it. Use the repayment calculator or the sliders on the website to decide exactly how much money you need and after how many days you’d like to repay it. You are then shown your loan in real-time. It is simple, clear and transparent.
Step 2: Complete the secure online application form. You don’t need to offer much information, typically your ID number, employment details, monthly income and expenses as well as your bank account information. A decision is then made immediately.
Step 3: Once your loan has been approved, the lender will need to verify your income. You will need to provide your most recent payslip or bank statement. You can simply upload these online, to make the process even faster.
Step 4: The money is transferred to your bank account. The repayment sum is scheduled to be collected from your bank account on the date specified, so you just need to ensure the required funds are available.
One final point… Some people simply don’t want a credit check carried out on them, something which they don’t need to worry about if they use a loan shark. However, even with a poor or low credit score, some people can gain access to funds from online reputable lenders. In addition, you can check out your credit file yourself and make practical steps to improving it. This doesn’t need to take more than a few months, and is a far safer, regulated and sensible method of gaining the cash you need, without having to use a loan shark.