Although many people may need financial help at some point, borrowing money is not something many like to talk about.<\/p>\n
Because of this you might not know as much as you should about applying for a loan.<\/p>
It could be an unexpected medical expense, a deposit to secure a place at a school or university, a car repair, home renovation or overseas holiday.<\/p>\n
Planned or unexpected, sooner or later most people will face an expense they can\u2019t cover from their cash flow or savings.<\/p>
\u201cWhen this happens, personal loans are often a consideration,\u201d explained Marlies Kappers, chief marketing officer at DirectAxis.<\/p>\n
She further stated home renovations and education are among the top reasons people apply to the financial services provider for personal loans.<\/p>\n
The first thing prospective loan applicants need to understand is that credit providers can\u2019t approve every application they receive.<\/p>\n
The National Credit Act regulates lending in South Africa.<\/p>\n
This law puts most of the responsibility on the provider to check that the applicant can afford to repay the loan.<\/p>\n
Credit providers must follow a series of steps before approving the loan.<\/p>\n
These include confirming the applicant\u2019s credit score, income, amount of existing debt compared to income and other expenses.<\/p>\n
There are four credit bureaus \u2013 Experian, TransUnion, CompuScan and XDS \u2013 which provide credit scores.<\/p>\n
Although South Africans are entitled to one free credit report a year from one of these providers, most don\u2019t apply for this and as a result don\u2019t know their score.<\/p>\n
ALSO READ:<\/p>\n
Local business helps the children of Epworth<\/a><\/p>\n Smiley Kids Albemarle donates much-needed items to Epworth<\/a><\/p>\n \u201cThis means people are surprised when an application for credit or a personal loan is turned down.<\/p>\n \u201cUnfortunately, this can lead to some jumping to the conclusion that they\u2019ve been ‘blacklisted’,\u201d said Marlies.<\/p>\n There\u2019s no such thing as ‘blacklisting’, she explained.<\/p>\n \u201cIf your loan application is not approved it could mean you have a poor credit score and based on that, credit providers are unable or unwilling to lend you money.<\/p>\n \u201cThe problem is that the term \u2018blacklisting\u2019 is misleading and many people assume there\u2019s nothing they can do about a poor credit score.<\/p>\n \u201cThat\u2019s not true.<\/p>\n \u201cYou can gradually improve it by reducing debt, paying what you owe on time and building your profile as someone who is financially responsible.\u201d<\/p>\n Assuming you have a suitable credit score other documentation you will need when applying for a personal loan includes:<\/strong><\/p>\n \u2022 Proof of identity in the form of a clear copy of your South African identity document.<\/p>\n \u2022 Proof of residence, such as a recent utility or rates invoice or similar document confirming your residential address.<\/p>\n The document shouldn\u2019t be more than two months old.<\/p>\n If you are renting and have a PO box rather than a street address, you will need to provide some other form of confirmation, such as an affidavit from your landlord.<\/p>\n \u2022 Proof of income.<\/p>\n This is straightforward as you can provide copies of recent payslips or bank statements for the past three months.<\/p>\n This is the minimum needed.<\/p>\n In some cases, applicants may be asked for additional information, for example, people married in community of property might need a spouse\u2019s permission.<\/p>\n \u201cThe law requires credit providers to check your credit score and collect other information, so you don\u2019t borrow more than you can afford.<\/p>\n \u201cIn order for lenders to be able to do this, you also have a responsibility to ensure what you provide is accurate and that you answer any questions about your expenses and other debt honestly,\u201d said Marlies.<\/p>\n Hav<\/strong>e a story?<\/strong><\/p>\n Contact the newsroom by emailing: Melissa Hart (Editor)\u00a0<\/span>germistoncitynews@caxton.co.za<\/a>\u00a0<\/strong>or Leigh Hodgson (News Editor)\u00a0<\/span>leighh@caxton.co.za<\/a>\u00a0<\/strong>or Kgotsofalang Mashilo (journalist)\u00a0kgotsofalangm@caxton.co.za<\/strong><\/a><\/p>\n Remember to visit the Germiston City News on the following social media platforms:<\/p>\n Facebook<\/a><\/strong><\/p>\n Twitter<\/a><\/strong><\/p>\n Instagram<\/a><\/strong><\/p>\n YouTube<\/a><\/strong><\/p>\n Or add the GCN on\u00a0<\/b><\/span>WhatsApp 079 406 1181<\/strong>\u00a0<\/span>or\u00a0BBM (BBM Pin: 7F102137)<\/strong>\u00a0<\/b><\/span>today, to get all the latest news.<\/p>\n Catch-up on more local news with our sister newspapers\u00a0<\/span>Bedfordview Edenvale News<\/a><\/strong>,\u00a0<\/span>Alberton Record<\/a><\/strong>\u00a0and\u00a0<\/span>Kempton Express<\/a><\/strong>.<\/p>\n