Researching the immense amount of loans available in South Africa, you might have wondered, how do South African loans measure up to the rest of the world? Are we paying more or less on interest rates? Are we being hijacked of our hard earned money in loan repayments? Well, it all depends on what type of loan you’re interested in and for what purposes you’ld like to use it.
Let’s look at a few interesting facts around South African Loans.
According to a study by the World Bank in 2014, South Africans were the biggest borrowers in the world. And they appeared to be borrowing mostly from friends and family, private micro-lenders and to a far lesser amount from financial institutions. This report from the World Bank, known as the Global Findex database, provides detailed data on how individuals use financial services worldwide and assesses saving, borrowing, risk managing and payment methods. This report also detailed that South Africans were mostly applying for loans to cover day-to-day living costs. This is no surprise. In South Africa, the cost of living is very high in relation to average household income.
It’s common to expect that we’re paying higher interest rates on our loans than we would in other countries. Although, we shouldn’t forget to factor in the daily living expenses correlated to another country, for example, the UK. As South Africans, we might be paying interest rates around 9% on the average loan. Whilst in the UK, one could roughly pay an interest rate of 3.5%. This sounds great, only until you start factoring in the increased cost of living.
So, one can say that we are rather on par with other countries concerning the availability and cost effectiveness of loans in South Africa. You can rest assured in the fact that we find ourselves snuggly in the middle of the Rankings by Country Interest Rate through a list of countries around the world.
To ensure that you get the best loan with the most cost-friendly interest rate, shop around and compare all the different South African loans options for a while before you rush in to get a loan. The Fincheck team wishes you the best of luck, and a big thumbs up for our country, South Africa!