Getting access to a loan in South Africa has become slightly easier following amendments to the National Credit Act. Banking institutions have been trusted lenders for decades but an increasing number of people are also turning to micro lenders when they need cash.
A segment of the market that was previously ignored is the pensioner segment.
Loans for pensioners in South Africa
Studies have shown that regular income flow pensioners have access to credit, but this also makes them easy prey for loan sharks and other unscrupulous micro lenders. They are often charged at more than double the rate of commercial banks for short term loans. This can largely be attributed to the fact that many lenders expect the loans to be repaid within 24 months and it’s expected that pensioners will have a much harder time repaying the loan on time.
While some lenders don’t lend to pensioners at all, there are some institutions that do make exceptions.
With some lenders, government pensioners may qualify if they do not have any other accounts.
Capitec Bank is one commercial institution that does have loan options available to people receiving a monthly pension.
Other institutions provide loans to individuals waiting for pension fund or lump sum pay-outs. These bridging loans can be useful for helping you while you take care of your monthly expenses as your pay-out is being processed.
Life doesn’t stop when your working life does. Expenses continue to pile up and there are daily living expenses. Getting a loan while you wait for your pay out could make this process much easier.
What documents are required for these loans?
- A valid South African ID
- Pension slip
- Copy of pension card
- One months’ full bank statement
Once you find the right kind of lender for your needs, make sure that you have these documents ready so that your application can be processed quickly – giving you access to cash much faster.