Debt and loans form a crucial part of our adult life. When used responsibly these loans can act as enablers, allowing you to buy a car, a house or other assets that you do not have cash for. These assets can improve your quality of life and maybe even your earning potential.
However, sometimes we can get ourselves behind on payments or perhaps we miss a few payments. This all affects our credit score and can give us a bad credit score. A credit score is what lenders use to judge the risk of your application. The lower the score, the more risk there is associated with the loan. You can no longer be blacklisted, but you can have a bad credit score.
What is a Credit Score & How is it Calculated?
Several factors affect your credit score. These factors are all used in determining your numerical score that the lenders will use to rate your credit.
According to popular credit score app Clearscore, these are the main factors that influence your credit score:
- Applications – Apply for many accounts at the same time can negatively affect your credit score. This can be seen as desperate for credit or erratic behaviour which is associated with higher risk. This is why it is best to make a decision and apply for credit.
- Length of Credit – The longer you have had credited the better and the older your accounts are the better.
- Payment Pattern – If you pay on time, pay late or miss payments; it will form part of your payment pattern. Pay on time to keep a positive payment pattern.
- Credit History – Your credit history plays a huge role in your score. The amounts and types of credit play a large part here as banks want to make sure that you can handle specific amounts of credit responsibly.
Types of Online Loans
Online Loans for Bad credit can not be hard to find. Applying with some of the top lenders within your affordability means could help you secure the loan you are needing. However, this does come down to your credit score, affordability and risk profile that will be evaluated by the creditor.
But what types of loans can you get online in South Africa? There are several loan types you can get online in South Africa from licensed and responsible lenders. These loan types include:
- Payday Loans – Payday loans are loans designed to be taken out mid-month to help you get to the end of the month. The loan is then paid off over a few months. These loans can be very helpful in covering unforeseen expenses. Mpowa Payday Loans is a premium provider of these loan types.
- Short Term Loans – Short Term Loans are classified as loans that are paid back within or under six months. These loans are often used for unforeseen expenses or planned expenses. Examples include car repairs, medical expenses or travel and holidays. We urge all readers to use debt responsibly.
- Same Day Loans – If you need cash in your bank account fast then Mpowa Loans is the place to be. They have streamlined the service while remaining within all the regulations. This means you could get your loan paid into your bank account the same day!
- Virtual Credit Cards – Fasta offers a useful virtual credit card. This credit card is virtual so there are no delivery fees and it can be issued quickly. This card can be used for shopping online and in-store making it easy to spend your loan.
Which Loan Company is Best for Bad Credit?
All lenders in South Africa have to follow very strict laws set out by the National Credit Regulator (NCR). This agency works hard to ensure that creditors are responsibly providing credit. This means that all companies will need to assess and make judgements according to your profile.
Two companies that stand out for their service, innovation and speed are Mpowa Loans and Fasta Loans. These companies are well known in the industry and are responsible lenders working closely with the NCR. They provide online loans, payday loans and sometimes online loans for bad credit. It all depends on your credit score, affordability and risk profile that will be decided by the creditor.
Want to know more about their product offering? Read their reviews here: