Revolving loans in South Africa

Many South Africans are failing to make ends meet owing to financial challenges they go through. But the financial industry has made it easier by allowing some financial institutions to hand out loans to people.

Banks and lenders have designed different types of loans that are customised for people depending on their affordability namely long term, short-term cash loans, debt consolidation, etc.

But there is another type of loan that people often forget about or just have never heard of, it is called a Revolving Loan. A revolving loan is the type of loans with a fixed monthly repayment. The interest rate varies taking into account a client’s credit score and their affordability. The requirements are inviting and it’s probably what any other person would love to have.

The difference between a revolving loan and some other loans is that you are allowed to borrow the money again up to your original loan amount, but this can only happen once 15% of the loan has been repaid.

It looks ok since one is able to repay more into the loan at any time, meaning of course that if you have some extra money you can use it to pay off the loan faster, which would make the money available again should you need to use it.

Another big disadvantage is that revolving loans have debt protection should you want to make use of it. Debt protection is a financial facility that enables you to pay off your debt, in cases of temporary or permanent disability, retrenchment and even death.

So be sure to look at the option of debt protection if you are considering getting a revolving loan.

Banks such as FNB, Standard Bank, Absa and even at Woolworths Financial Services offer such services.

Standard Bank’s Revolving Credit Plan.

  • Loan Amount Available: R6,000 – R300,000
  • Payment Terms: Unlimited (if the minimum fixed monthly instalment is paid)
  • Monthly Service Fee: This may vary based on the loan amount (please note that there is a once off initiation fee)

Do i qualify:

  • Must be a South African citizen or permanent resident
  • Have a valid ID Book
  • Must be older than 18 years old

FNB Bank’s Revolving Loan

  • Loan amount available: R6, 000 – No Maximum
  • Payment Terms: Unlimited (you can access your money once 15% of the loan has been repaid)
  • Monthly Service Fee: R40 (only payable if you make use of the revolving loan facility)
  • When do you qualify: You must have an FNB Personal Cheque Account

ABSA Bank’s Revolving Loan

  • Loan amount available: R15, 000 up to 3 times your gross monthly salary. Maximum is R150, 000
  • Payment Terms: There is no maximum repayment period, as long as a minimum of 2.5% of the loan amount is repaid each month.
  • Monthly Service Fee: This may vary depending on your loan amount.
  • (But there is also a once off initiation fee payable)

Do i qualify:

  • Must be an ABSA Customer with an account older than 6 months.
  • Earn a gross monthly income of at least R8, 000
  • Must be a South African citizen
  • Have a valid green ID Book
  • Be older than 18 years.
  • Woolworths Revolving Loan
  • Loan amount available: R1,000 – R75,000
  • Payment Terms: 12, 24, 36, 48, 60 months
  • Monthly Service Fee: R26 (There is an initiation fee of R350)

Do i qualify:

  • Must be over 18 years old.
  • Have a valid SA ID Book
  • Have an active bank account
  • Be permanently employed and earn at least R2,000 per month

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