So many names and terms for the same thing at the end of the rainbow!
A Loan in general is a sum of money borrowed and to be repaid with interest by a specific date. The search for a specific loan may become an extremely technical endeavour. Especially when one has to take into account all the differences between types of loans. That’s why Fincheck supplies you with a loan comparison page to do all the sifting on your behalf!
All loans work on the same basis. Therefore, all loans will seem like the same thing. The real differences lie in your eligibility for the different loans and what their end usage is for.
To cast some light, here are the basic differences between personal, pay day and student loans.
A personal loan is probably the most basic form of loans in South Africa. The lender provides an amount of money to the borrower to be repaid with interest. What sets it apart from pay day and student loans are more about what the agreement doesn’t contain compared to what we just explained. All the basic criteria still applies - like the calculation of your credit score, the request of your employment, residential and banking details.
Pay Day Loans
Pay day loans, online loans, short term loans or call it as you need it, are to address a need with cash on demand. It will definitely consist of a much higher interest rate compared to personal and student loans. The requirement in question here (although some others exist) is your employment details. A pay day loan works on the basis that the loan will be repaid when you receive your next paycheck.
There are quite a few characteristics that make a student loan. It could be that a relative or close friend signs as the principal debtor for your student loan. It could be that the repayment agreement for a student loan only starts after the student has graduated (with only the servicing of interest during the years of study). The basic difference though that drives the student loan is the presence of a registered student at a recognized academic institute in South Africa.
“It’s hard to find something in the dark, let Fincheck switch on the light for you.”
Check out our Loan Comparison Page - it’s a great tool for finding the Loan you need!