Personal Loan Myths That Might Mislead You

 

When money is tight, many people turn to personal loans in South Africa as a way to cover unexpected costs or manage debt. But it’s easy to get caught up in myths that can cloud your judgment because there’s just so much misinformation out there. Some of these misconceptions may even stop you from making sound financial decisions. So before you rule out or rush into a personal loan, it’s worth separating fact from fiction so you can make informed choices that suit your situation.

 

Myths about personal loans in South Africa

What’s actually true

Personal loans damage your credit score

A temporary dip may happen during the credit check, but on-time payments actually improve your score over time.

Your family will inherit your debt

Debt isn’t passed down. The borrower’s estate is responsible—unless a family member co-signed or stood surety.

Personal loans always come with high interest rates

Interest rates vary. With a good credit score, you can qualify for affordable, fixed monthly repayments.

Only banks offer personal loans in South Africa

Many registered lenders (including online platforms) offer loans, often with lower fees or more flexible terms than big banks.

Applying for a personal loan is complicated

It’s quick and straightforward. Most applications are online and require only a few standard documents.

 

 

Personal loans in South Africa actually damage your credit score – Myth!

 

Many people believe that their personal loans can damage their credit score permanently. This is one of the biggest misconceptions! When you apply, the lender does a credit check that can cause a small dip in your score, but this is only temporary. If you make every repayment on time, month after month, you’ll actually build a stronger credit history and improve your score in the long run.

 

Creditors can hold your family liable for your debt – Another myth!

 

A lot of people worry that if they pass away, their family will be forced to take over their debt. This does NOT happen! Debt belongs to the person who borrowed the money, not their loved ones, so it can’t be inherited. When someone dies, their estate is responsible for paying off any outstanding balances. The only exception is if a family member co-signed the loan or stood surety for it.

 

That said, any debt left behind will reduce what’s left in your estate for your loved ones. That’s why it’s a good idea to plan ahead with a proper will, and to consider life insurance or credit life cover.

 

Personal loans in South Africa come with very high interest rates – Myth!

 

A lot of people shy away from personal loans because they assume the interest will be unmanageable. Not true! The amount you’ll pay on a personal loan will depend on various factors. Yes, rates are often higher than on secured loans, but if your credit score is healthy, you could still qualify for an affordable rate with predictable monthly instalments that fit neatly into your budget.

 

Only banks give out personal loans in South Africa – 100% Myth!

 

Many people assume their bank is the only place to turn when they need a personal loan, but that’s not true. In South Africa, there are plenty of registered credit providers, from major banks to smaller lenders and online platforms. Compare different offers to find lower fees and better interest rates, or perhaps even more flexible repayment terms than what your own bank can give you.

 

Applying for a personal loan is difficult  – Myth!

 

A lot of people assume that getting a personal loan is a long and complicated process, but that’s not true anymore. Today, most applications can be done online with just a few documents, like proof of income, an ID, and recent bank statements. Depending on your profile, you could qualify for loans starting from as little as R2,000 and going up to R350,000, with repayment terms between 7 and 72 months.

 

FindBetter makes this process even simpler by helping South Africans compare loan options in one place. FindBetter makes it simple to find a loan that works for you, without the stress of dealing with several lenders.

 

Ready to explore your loan options?

 

At FindBetter, we make personal loans in South Africa simple and accessible. Whether you need a smaller loan to cover everyday costs or a bigger one for larger goals, we’ll help you find the right option with repayment terms that fit your budget. Complete the form online or send us an email at enquiries@findbetter.co.za to speak with a loan advisor.

 

 

 

Sources:

https://findbetter.co.za/personal-loan/

https://personal.nedbank.co.za/learn/blog/busting-personal-loan-myths.html

https://www.oldmutual.co.za/articles/dangerous-debt-myths/

 

Comments

Post a Comment

Popular posts from this blog

Debt Review Myths: Can You Get Blacklisted While Under Review?

Image
  If you’re overwhelmed by debt and facing legal threats from creditors, it might be time to speak with debt review companies in South Africa. Starting the debt review process can protect your income and assets while putting you on a clear and realistic path to becoming debt-free. Debt review (also called debt counselling) is a legal solution for managing over-indebtedness in South Africa. A registered debt counsellor will assess your finances and design a realistic repayment plan tailored to your situation. This process shields you from legal action and ensures that you can pay off your debts without risking your home, car, or other assets. Still, many people hesitate to begin debt review because of common misconceptions—especially the fear of being blacklisted. Let’s clear that up.   Can you get blacklisted while under review?   The short answer: not if you’re under proper guidance. You risk blacklisting only if you already have a poor credit history and con...
Read more

Smart Debt Solutions: Why SA Is Turning to Counselling?

  Paying off debt can feel like an uphill battle — especially when rising interest rates and unexpected expenses always seem to throw your finances off track. If managing multiple payments is becoming overwhelming, you might need a debt solution in SA in the form of counselling. A licensed credit counsellor will help you understand your repayment options and rebuild financial stability.   What is debt counselling?   Debt counselling in South Africa was introduced under the National Credit Act and is regulated by the National Credit Regulator (NCR). It's designed to assist consumers who are struggling to manage their debt. Instead of taking out a new loan, debt counselling helps you combine your existing debts into a single, structured repayment plan.   How the process works   A debt counsellor will first assess your debts and monthly budget to determine what you can realistically afford. Once they have a clear picture of your financial situat...
Read more

Debt Counselling: How to Choose the Right Partner for Financial Relief

Image
  Feeling hopeless because of overwhelming debt? Don’t let the situation prevent you from regaining control of your life. Debt counselling in South Africa can provide a lifeline while building a better credit score. The key is to find an experienced company that offers legitimate and personalised debt counselling solutions tailored to your needs. Here’s how:   Make sure they are accredited by the NCR.   Firstly, take the time to verify the debt counsellor’s accreditation with the National Credit Regulation (NCR). This is an important credential ensuring that the provider provides debt counselling in South Africa legally, according to ethical practices and industry standards.   Find Better only works with NCR-accredited Debt Counselling companies, so you can trust our compliance with our industry’s regulations to protect your rights and privacy.   Ensure your data privacy.   When you choose a debt counselling partner, you're entrusting ...
Read more