Are Loan Sharks Legal in South Africa
What is a loan?
A loan is money borrowed from a creditor and is repaid with interest.
How does a loan work?
A loan is a promise from a lender that you, the borrower, would receive money and repay the quantity borrowed, plus interest, over a specified time period.
What are the types of loan?
1. Personal loans
2. Auto loans
3. Student loans
4. Mortgage loans
5. Home equity loans
6. Credit-builder loans
7. Debt consolidation loans
8. Payday loans
What are the advantages of bank loans?
1. Allow you to expand your business.
2. Allows you to secure financing without giving up complete control of your business.
3. Interest rates may be fixed for the duration, allowing you to know the amount of repayments throughout the loan’s life.
4. You are not required to provide the lender a percentage of your profits or a stake in your business.
What are the disadvantages of bank loans?
1. Strict eligibility standards may make loan approval especially tough for start-ups and newer firms.
2. The application process for obtaining a bank loan is lengthy.
3. Loans are secured against business assets or personal property such as a house, thus you may lose your business assets or personal possessions.
Who is a loan shark?
A loan shark is someone who offers loans at exorbitant interest rates, has strict terms of collection in the event of default, and generally operates outside the law.
Are loan sharks legal in South Africa?
Loan sharks are unlawful lenders in South Africa since they lend money without a license.
How numerous are loan sharks in South Africa?
According to a new Wonga research, there are around 40,000 non-registered credit lenders, or ‘loan sharks,’ operating in South Africa at a ratio of 1:100 for every home in informal settlements.
