You don’t have to look hard to find a short-term lender in South Africa, with multiple companies willing to give you a quick buck in your moment of need.
Short-term lenders like Wonga and Boodle give users access to amounts ranging from one hundred rand to a several thousands, which can be paid back in one day, or over a few weeks.
Companies such as Wonga have come under fire in the past, though, for lending money to people without properly verifying their income.
The number of South Africans who are over-indebted is also of concern, according to the SAHRC. According to a March 2015 statement by the commission, 50% of SA’s credit-active consumers have impaired credit records.
How much online lenders charge
With sliders for the loan amount and duration of the loan, finding out how much you will be charged on sites like Wonga.co.za is a quick task.
The company states its service has an annual interest rate of 60%, but most loans are paid off after a few days or weeks.
If you fail to pay back your loan, interest and fees will build up, after which “collectors” will be used to reclaim the amount.
Below are examples of how much interest you would have to pay a short-term lender if you borrowed R2,000 over 30 days.
Wonga.co.za charges 22.88% in interest and fees for R2,000 over 30 days.
The total you would have to pay back: R2457.50
Wannaloan.co.za charges 21.86% in interest and fees for R2,000 over 30 days.
Total repayment: R2,437.21
GetBucks.com charges 21.32% in interest in fees for R2,000 over 30 days.
Total repayment: R2,426.39
Mulah.co.za charges 21.81% in interest and fees for R2,000 over 30 days.
Total repayment: R2,436.13
Boodle.co.za charges 22.75% in interest and fees for R2,000 over 30 days.
Total repayment: R2,455.03
Power Loans charges in 24.31% in interest and fees for R2,000 over 30 days.
Total repayment: R2,486.12