How to use payday loans to your advantage in South Africa

Payday loans, personal loans, and other short term loans are loans that do not require collateral like larger loans, and help you with unexpected expenses and get you back on your feet in a short amount of time. These fast cash loans tend to be faster than your bank loaning out money. However, it is smart to think about whether you should take out a loan for your current financial problem, because a loan can make it worse too. So, here is a list of examples of when you could and should not take out a loan.

Best moments to take advantage of a personal loan

Large purchases: 

Think of purchases such as new washing machines, generators to ease the annoyance of load shedding, a deposit you have to pay for your apartment and other large purchases that are a one time transaction. For example if you’re moving to Cape Town but miss some money to pay off your deposit, then considering a quick payday loan for an apartment in Cape Town is a proper reason why you could take out a same day loan.

Unexpected expenses:

Not every payment that you have to make is expected, having to go to the mechanic because your car is wrecked is not something you are hoping for, but it might happen on an unlucky day that you just drove over the wrong pothole, ruining your wheels. Since car repairs are not cheap but have a direct impact on your income and impact your mobility drastically, so, one could say that this is an urgent matter as this requires an urgent loan to get your car ready as quickly as possible. The same can be said about theft.

Vacation Costs:

Want to take a luxury vacation, but you do not yet feel comfortable paying it all at once including the expenses at your holiday destination? A personal loan might just help you enjoy a beautiful holiday without worrying about going broke. 

Wedding Costs: 

Missing money to pay off the wedding or the lobola became more expensive than you thought, then a cash loan can help you to still be able to celebrate this beautiful moment of your life without any drama from the family.  

When not to take a short-term loan

There are many things you should not take out a loan for. Below are some examples of when not to take a payday loan, but in short loaning money to pay for  periodical costs is something you should avoid to stay out of debt.   

Standard living expenses:

Where a personal loan might help you out in the short-term, if you are unable to improve your living situation, then it will sting you in the long term.

To pay off debt:

For the same reason that covering standard living expenses with a loan to pay off loan debt will only cause more trouble in your financial situation instead of the relief you’re seeking. 

University- and other long-term loans:

This is just an example, but the same can be applied to mortgages, they are way better options of loans (and grants) to take for these costs that will save you more money in the end then a personal- or short-term loan will do for you. 

We hope that this information will provide you with the financial guidance you need to take out a short-term loan and to do so safely. If your reasoning for taking out a loan is still applicable do not hesitate and calculate your expenses right here.