R 500
R 125000
R 250000
REPRESENTATIVE EXAMPLE: ESTIMATED REPAYMENTS OF A LOAN OF R30,000 OVER 36 MONTHS AT A MAXIMUM INTEREST RATE INCLUDING FEES OF 27,5% APR WOULD BE R1,232.82 PER MONTH. REPAYMENT TERMS CAN RANGE FROM 2 - 72 MONTHS. CREDITUM IS AN ONLINE LOAN COMPARISON TOOL AND NOT A LENDER. INTEREST RATES CHARGED BY THE LENDERS FOUND IN OUR SERVICE CAN START AS LOW AS 20% APR, INCLUDING AN INITIATION AND SERVICE FEE DETERMINED BY THE LENDER. THE INTEREST RATE OFFERED DEPENDS ON THE APPLICANTS' CREDIT SCORE AND OTHER FACTORS AT THE LENDER'S DISCRETION.

Equity Loans

In order to find the best loan for your needs, it is important to compare loans online.

  • Apply in minutes
  • Get offers from multiple lenders
  • Choose the best loan option available

Note: If you are not satisfied with the loan offers, you don’t have to select any of them.

Applying for a loan online – How it works

About 5 minutes

1. Select loan amount

In the calculator, select the loan amount you need.

The minimum amount is R 500 and the maximum amount is R 250 000.

 

2. Fill out contact details

Fill out your email address and your cellphone number.

Keep in mind that you will receive the loan offers through these channels.

 

3. Fill in additional details

The applications are often processed automatically. To achieve this, banks and lenders need some additional details, like your employment status and monthly income.

 

4. Select the best loan offer

Compare the offers & select the best one! If you are not satisfied with the offers, you don't have to do anything. The application expires automatically.

 

Equity Loans in South Africa

If you are a South African citizen in need of a substantial amount of cash, equity loans may be the answer you are looking for. Equity loans are a type of secured loan that allows you to borrow money against the equity in your property. This means that the amount you can borrow is determined by the value of your property, minus any outstanding mortgage or loans. Unlike unsecured loans, equity loans generally have lower interest rates, making them more affordable and easier to manage. But with so many lenders and varying loan rates, it can be overwhelming to find the best offer. In this article, we’ve done the research for you and compiled a list of the lowest equity loan rates in South Africa. Plus, we’ll guide you through the application process, so you can get the cash you need quickly and easily. Read on to find out more.

Understanding Equity Loans

Equity loans are a type of secured loan that allows you to borrow money against the equity in your property. Equity is the difference between the value of your property and the amount of mortgage or loans you still owe on it. For example, if your property is worth R1 million and you still owe R500,000 on your mortgage, then you have R500,000 in equity. Equity loans allow you to borrow money against this equity, using your property as collateral.

There are two types of equity loans available in South Africa: home equity loans and home equity lines of credit. A home equity loan is a lump sum loan that is repaid over a fixed term, usually between 5 and 25 years. The interest rate is fixed, which means your monthly payments will be the same throughout the loan term. A home equity line of credit, on the other hand, is a flexible form of borrowing that allows you to withdraw money as you need it, up to a pre-approved limit. The interest rate is variable, which means your monthly payments can fluctuate based on market conditions.

Types of Equity Loans Available in South Africa

In South Africa, there are several types of equity loans available, including:

  • Home equity loans
  • Home equity lines of credit
  • Bridging finance
  • Second mortgages

Home equity loans and home equity lines of credit have already been discussed in the previous section. Bridging finance is a short-term loan that is used to bridge the gap between the purchase of a new property and the sale of an existing property. This type of loan is usually repaid within 6 to 12 months. Second mortgages are a type of secured loan that allows you to borrow money against the equity in your property, in addition to your primary mortgage. Second mortgages have higher interest rates than home equity loans and home equity lines of credit, but they can be a good option if you need to borrow a large amount of money.

Benefits of Equity Loans

There are several benefits to taking out an equity loan in South Africa. Firstly, equity loans generally have lower interest rates than unsecured loans, such as personal loans or credit card debt. This is because the loan is secured against your property, which reduces the lender’s risk. Secondly, equity loans can be used for a variety of purposes, such as home renovations, debt consolidation, or even starting a business. Thirdly, equity loans can be easier to manage than multiple unsecured loans, as you will only have one monthly payment to make.

Another benefit of equity loans is that they can be used to improve your credit score. If you have a lot of high-interest debt, such as credit card debt, taking out an equity loan to consolidate your debt can lower your overall interest rate and reduce your monthly payments. This can make it easier to make your payments on time, which can improve your credit score over time.

Equity Loan Eligibility and Requirements

To be eligible for an equity loan in South Africa, you must:

  • Own a property with equity
  • Be a South African citizen or permanent resident
  • Have a good credit score
  • Have a stable income

The amount you can borrow will depend on the value of your property and the amount of equity you have. Most lenders will require a minimum of 20% equity in your property, but some may require more.

In addition to these eligibility requirements, you will also need to provide documentation to support your application, such as:

  • Proof of income, such as payslips or bank statements
  • Proof of residence, such as a utility bill or lease agreement
  • Proof of ownership of the property, such as a title deed or bond statement
  • A credit report

How to Find the Lowest Equity Loan Rates

With so many lenders offering equity loans in South Africa, it can be difficult to find the best offer. Here are some tips to help you find the lowest equity loan rates:

  • Shop around: Don’t just accept the first loan offer you receive. Shop around and compare rates and terms from multiple lenders.
  • Check online: Many lenders offer online application processes, which can be more convenient and faster than visiting a bank branch.
  • Use a comparison website: There are several websites that allow you to compare loan rates and terms from multiple lenders in one place.
  • Negotiate: Don’t be afraid to negotiate with lenders to try to get a better rate or more favorable terms.

Remember, the interest rate is not the only factor to consider when choosing an equity loan. You should also pay attention to the loan term, fees, and repayment options.

Applying for an Equity Loan Online

Many lenders in South Africa offer online application processes for equity loans. Here’s how to apply online:

  1. Choose a lender: Use the tips above to find a lender that offers the best rates and terms for your needs.
  2. Visit their website: Go to the lender’s website and look for the equity loan application page.
  3. Fill out the application: Enter your personal and financial information, as well as information about your property and the equity you have.
  4. Submit documentation: Upload the required documents to support your application, such as proof of income and proof of ownership.
  5. Wait for approval: The lender will review your application and let you know if you are approved, and for how much.
  6. Accept the loan: If you are approved, you can accept the loan offer and sign the agreement.

Equity Loan Repayment Options

Equity loans in South Africa usually have fixed monthly payments, which are determined by the loan amount, interest rate, and loan term. However, some lenders may offer flexible repayment options, such as:

  • The ability to make extra payments to pay off the loan faster
  • The ability to skip a payment if needed
  • The ability to change the payment date if needed

If you are struggling to make your payments, contact your lender as soon as possible to discuss your options. They may be able to offer you a payment plan or other assistance.

Risks and Considerations of Equity Loans

While equity loans can be a good option for some borrowers, there are risks and considerations to keep in mind. Firstly, your property is used as collateral for the loan, which means that if you are unable to make your payments, the lender can repossess your property. This can be especially risky if you are already struggling financially.

Secondly, equity loans can be more expensive in the long run than unsecured loans, as you will be paying interest on the loan for a longer period of time. You should carefully consider whether the benefits of the loan outweigh the costs.

Finally, taking out an equity loan can increase your overall debt load, which can make it harder to achieve your long-term financial goals. Make sure you have a plan in place to manage your debt and pay off the loan as quickly as possible.

Equity Loan Alternatives

If an equity loan is not the right option for you, there are several alternatives to consider, such as:

  • Personal loans: Unsecured personal loans can be used for a variety of purposes and may have lower interest rates than credit cards or other high-interest debt.
  • Credit cards: If you only need to borrow a small amount of money, a credit card may be a better option than a loan.
  • Savings: If possible, consider using your savings to pay for expenses instead of borrowing money.

Conclusion

Equity loans can be a good option for South African citizens who need to borrow a substantial amount of money. By understanding the types of equity loans available, the benefits and risks of borrowing, and how to find the lowest loan rates, you can make an informed decision about whether an equity loan is right for you. Remember to compare rates and terms from multiple lenders, and to carefully consider your ability to repay the loan before taking out an equity loan.

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Lime
Loan amounts
R300
R5400
Payback period
5 days to 7 weeks
Interest rate
Daily interest rate of 0.1% to 0.16% depending on Tariff Group
Other fees
R69/month + opening cost 16,5% of first R1000 lent + 10% of loan amount over R1000 (+VAT). Limited to lesser of 15% of loan amount (+VAT).
Representative example: If you want to borrow R2000 for 30 days, you have to pay back R2428.78. The total cost includes interest, VAT, and a monthly service fee.
MyLoan
Loan amounts
R100
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Payback period
7 days to 36 months
Interest rate
MyLoan is an online loan broker and not a lender. Interest rates of the loans in the comparison panel can start as low as 20% APR.
Other fees
MyLoan is an online loan broker and not a lender. Other fees depend on the brokered loan.
Representative example: a R50 000 loan at an interest rate of 24.5% per annum plus a once-off initiation fee of R1 207.50 (added to the loan amount in this example) and a monthly admin fee of R69.00, over 72 months would have a total cost of R 103 155.57. The maximum annual interest rate including fees is 27.5%. Repayment terms can range from 1 - 72 months. MyLoan is an online loan broker and not a lender. T service is free and we work with NCR licensed lenders in South Africa. Interest rates charged by lenders can start as low as 20% APR, including an initiation and service fee determined by the lender. The interest rate offered depends on the applicants’ credit score and other factors at the lenders’ discretion.
Boodle
Loan amounts
R500
R8000
Payback period
16 days to 6 months
Interest rate
Daily interest rate of 0.17%
Other fees
Service fee R60 per month + Initiation fee R165 on the loan above R1000 + Insurance premium R4.50 per R1000 per month on the daily balance
Representative example: The payback time and total costs differ depending on the amounts. Final costs and fees are shown on the next page before agreeing to the loan.
Fasta
Loan amounts
R800
R8000
Payback period
1 month to 3 months
Interest rate
Monthly interest rate 3%
Other fees
Initiation fee R994 + Service fee R69 + Credit protection fee R48.76
Representative example: The payback time and total costs differ depending on the amounts. Final costs and fees are shown on the next page before agreeing to the loan.
MPowa
Loan amounts
R500
R8000
Payback period
16 days to 6 months
Interest rate
Interest of 5% per month, 3% on additional loans during the same calendar year
Other fees
Initiation fee of 16.5% of the capital amount on the 1st R1000 then 10% on each amount over R1000 plus VAT. A service fee of R60 per month plus VAT.
Representative example: The payback time and total costs differ depending on the amounts. Final costs and fees are shown on the next page before agreeing to the loan.