Business & Finance Blog

New Personal Loan Hits the Consumer Finance Market

SHARE
, / 401 0

IMAGE SOURCE: https://www.flickr.com/photos/cafecredit/27039231333   

The payday lender Wonga South Africa has released a new loan product aimed at consumers who need quick access to finance over a longer period of time. Rather than the 30-day repayment period offered on its payday loans, Wonga’s new personal loans allow consumers to choose a repayment term of between 2-6 months.

As with a payday loan, the personal loan is an unsecured finance product. That means assets such as vehicles or property are not required to secure the loan. Although that’s a clear benefit for many borrowers, there can still be charges and additional fees that apply if the repayments are not made when due.

What are the terms of the loan?

Wonga’s personal loans are designed to bridge the gap between payday loans and longer-term personal loans. Other lenders typically have repayment periods of between 12 months and 5 years and are offered by a number of current providers.

Wonga’s personal loans allow new customers to borrow a maximum of R4000 which is repaid over a period of between 2 and 6 months. If we take the example of a R4000 loan over 6 months, the total cost of the loan would be R5400. That is split into six equal monthly repayments of R900.

Who are personal loans suited to?

This type of loan is aimed at those who want to borrow more than they would be able to access with a payday loan but spread over a longer period of time to bring the cost of each repayment down. The fact that the borrower can determine the term of the loan allows them to choose a repayment amount that is both affordable and is the right fit for their monthly budget.    

Can you repay the loan earlier than originally agreed?

This is something that changes from lender to lender. Some lenders will charge early repayment fees to make sure they do not miss out on the interest due. However, Wonga actually encourages early repayment which does provide flexibility if the borrower has early access to the funds they need. However, you should always read the terms and conditions of any personal loan carefully before you sign on the dotted line.

Have you used personal loans before? What have your experiences been? Please share your thoughts in the comments below.    

Leave A Reply

Your email address will not be published.