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You can apply for 6 months loans online and get offers from our panel of direct lenders in seconds. These lenders specialise in quick cash loans with short repayments for a wide variety of financial needs.
Here’s everything you need to know about six month loans in South Africa.
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What Are 6 Month Loans?
When you need to borrow money, a six months loan in South Africa can be the right option you need. This is a type of short term loan designed to be repaid in six equal monthly instalments.
In other words, you have six months to pay back whatever loan amount you borrow. The majority of short-term loans over six months have fixed interest rates so that your repayments stay the same. A 6-month cash loan is usually meant for smaller amounts than a long-term loan.
These loans are also unsecured loans, meaning you don’t need to provide collateral. The ability to make repayments over six months makes things more affordable for borrowers. With quick and easy six months loans from online lenders, you can cover cash flow gaps, budget more effectively, and unlock more disposable income for daily expenses.
» READ MORE: Cash Loans in South Africa
Reasons for Taking Out a 6 Month Loan
There’s no one-size-fits-all when it comes to how the money can be used. Borrowers have different needs. The good news is that if you need the money for a legitimate purpose, there’s no reason why you can’t use the funds as you see fit. Here are a few reasons why people apply for short-term loans online in South Africa.
- General purpose. As mentioned, you can use the money with no restrictions. It’s common to split the funds towards various expenses, such as groceries, transport money, and other household expenses. The cash flow injection can ease financial pressures in case of income interruptions and unexpected expenses.
- Home improvements. A six-month short loan can help cover the cost of small or medium home improvement projects. For example, you might want to dig a well on your property, paint the walls, or build an extension to your home. Home renovations become more affordable when you have a little extra time to pay the money back.
- Wedding expenses. You can use short-term financing to cover wedding expenses. The cost of a wedding can quickly balloon up, causing cash flow interruptions. Taking a loan helps spread the cost evenly, so planning your special day is less stressful. Since a cash loan for six months typically involves small amounts, you don’t have to worry too much about racking up a lot of debt over your big day.
- Education costs. Despite your best efforts at saving, the numbers might not always add up. After all, there’s a long list of education expenses to cover – from tuition and textbooks to accommodation and equipment. A six-month cash loan can be a flexible form of funding to ensure you meet payment deadlines. Half a year might provide plenty of time to pay off the balance.
- Debt consolidation. Short loans for half a year can also work to consolidate debt. However, keep in mind that because of the short-term nature of the loan, you’ll likely have large monthly repayments. So make sure your budget can comfortably accommodate these. In addition, using the money to consolidate debt only makes financial sense if you find a low-interest rate that enables you to reduce borrowing costs significantly.
- Emergency expenses. Short-term loans for six months can be useful when you need cash quickly for an emergency, such as a broken down car, a stolen phone that needs to be replaced, or unexpected health expenses. The great thing about emergency loans for six months is that most lenders offer a fast, easy online application combined with fast approval and funding.
Types of Short-Term Loans
6 months short-term loans can be ideal for anyone looking for fast funding and who can pay back the debt as quickly as possible.
You can apply with a personal or payday loan lender. At RandWallet, we connect you to both types of lenders so you can compare available loan options in one place.
6 Month Payday Loans
Are you looking for a quick loan to pay back over half a year? Many payday lenders in South Africa offer short-term loans for six months, i.e. a debt that can be paid in instalments. However, they often use a tailored approach, where new customers have to earn trust before qualifying for a larger amount and a longer term.
Therefore, these payday loans may not be accessible if you’re a new customer with a particular lender. Usually, new customers can qualify for up to R4000 over 3 months. But existing customers with a good track record can borrow up to R8000 over six months.
In fact, six months is commonly the maximum loan term you’ll find for a payday loan. Longer loan terms are only available from personal loan lenders. Payday loans are known for being quite risky. They often have high interest rates, meaning the cost of borrowing the money can get expensive quickly in a short period.
The best way to use a payday loan is as a last resort and only if you can afford to pay back the loan amount. You repay the money as soon as possible and avoid taking out another payday loan unless it’s absolutely necessary.
Failure to repay the debt makes things more expensive, as payday lenders will likely charge additional interest and fees. This explains why some people end up taking out even more payday loans to pay off the existing ones. Eventually, these people may end up in a vicious debt cycle and may damage their credit scores.
6 Month Personal Loans
When looking for short-term credit, a personal loan is your best option. This type of credit offers flexible borrowing amounts. In addition, the interest rate on a personal loan will be lower than the payday alternative.
These loans are used to finance a range of different things, but you should know that personal loan terms can go up to 84 months (7 years). Half a year is usually the minimum repayment period available.
Short term loans over a few months are the best option only if you can repay the debt quickly within that timeframe. Your repayments will be larger because they’re spread over a shorter period. So, your overall finances need to be in a strong position before borrowing.
Pros and Cons of 6-Month Loans
Before you start comparing offers, do weigh the potential benefits and drawbacks to determine if this option is the best fit for your current circumstances.
Advantages
✔️ Highly convenient online loan application
✔️ Flexible loan amounts to suit a wide range of needs
✔️ More affordable monthly repayments than traditional payday loans
✔️ Personal loans have a lower interest rate
✔️ No collateral required
✔️ Quick access to the cash you need
✔️ Bad credit borrowers may qualify
✔️ Early repayments allowed with no penalties
Disadvantages
❌ Payday loans typically have higher interest rates than bank loans.
❌ You still have pressure to pay back the money in a short time.
❌ The repayment period may not be enough to sort out your financial situation
❌ The debt can become unmanageable if you struggle to make repayments on time.
❌ You can’t borrow as much because of the short loan terms.
How Much Can You Borrow With a 6 Month Loan?
As mentioned, you can’t borrow as much when borrowing money over a few months. Since the debt is only spread out over a short period, the loan amount needs to be small to ensure affordable monthly repayments.
If you’re applying with a payday lender for the first time, you can borrow as much as R4000. Existing borrowers typically qualify for up to R8000. Personal loan lenders offer more flexible loan amounts beyond R8000.
How much you can borrow depends on your monthly income, debts + expenses, and credit history. In any case, the most important thing when it comes to cash loans over a few months is that you can afford the repayments, regardless of how much you borrow.
How Much Will a 6-Month Loan Cost?
Interest rates and fees on 6 month repayment loans vary between different lenders. Some lenders offer personalised rates based on your credit history and risk profile. Keep in mind that short term loans, especially payday loans, generally have a higher interest rate than their long term alternative.
The good news is that most lenders allow early repayments. So, if you want to repay your loan sooner, you can do so without extra penalty fees. Since the lenders charge interest daily, you’ll save money on interest and fees with early loan repayment.
Let’s compare a few loans with 6 months to pay from some South African lenders.
| Boodle 6 months loan | FNB 6 months loan | Finchoice 6 month Flexi loan | |
| Amount | R8000 | R8000 | R8000 |
| Interest rate | 0.17% per day | 18.25% per annum | 5% per month |
| Fees | Service fee (60 per month) + initiation fee + insurance premium | Monthly service fee + once-off initiation fee + credit life insurance premium | Monthly service fee + once-off initiation fee + credit life insurance premium |
| Monthly repayment | R1 820.53 | R1 716.56 | R 1 815.50 |
| Total repayment | R10 923.18 | R10 299.36 | R10 892.97 |
What Do I Need to Qualify for a 6-Month Loan?
Before you apply for a 6 month cash loan online, you must meet the following basic requirements:
- South African resident
- At least 18 years old
- Regular employment with a monthly income of at least R5000
- Active bank account that receives your salary
During the application process, you’ll need to upload proof of income documents in the form of your most recent payslips or bank statements.
6 Month Loans for Bad Credit
You could still be eligible if you need a 6 month loan but have bad credit. Although most lenders prefer to give loans to good credit borrowers, they may also strongly consider your employment, monthly income, and expenses to determine if you can afford the debt.
Payday loans are a quicker and more efficient alternative than waiting for bank approval. Be aware, however, that 6 month loans for bad credit borrowers will cost more. Before applying for an expensive short term loan, it’s a good idea to check your credit report first.
In South Africa, every resident can get a free credit report once a year from credit bureaus like Experian and TransUnion. If your credit score is low and your credit history shows missed or late payments or inaccurate information, it’s wise to take action before borrowing.
Pay off any outstanding debts and make payments on time and in full. Also dispute any errors with the relevant credit reporting agency. Improving your credit score will go a long way towards ensuring easier approvals and lower interest rates for future credit applications.
How Can I Apply for a 6 Month Loan Online?
Applying for 6-month cash loans online with RandWallet involves a quick and easy three-step process.
- Step 1: Complete the online loan comparison form. Determine how much you want to borrow and fill in your personal information as well as your employment, banking, and contact details. You’ll get a fast response, but double-check your information to avoid application errors that can delay the process.
- Step 2: Compare multiple loan offers. Get loan offers from up to 10+ different lenders and banks. You must choose a short-term lender you can trust. The good news is that all our lender partners are registered credit providers with the National Credit Regulator. When choosing from available offers, be sure to compare interest rates, loan repayment terms, and other important factors.
- Step 3: Get cash in your bank account. Once you choose and accept an offer, you’ll complete the application process as instructed by the lender. If your application and credit check are successful, you’ll receive a loan agreement via email. Sign this contract if you agree with the lending terms and conditions. The lender will usually transfer funds into your account quickly upon approval.
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Frequently Asked Questions
A six month loan is a short term loan that is repaid in six monthly instalments. The loan amount typically goes up to R8000 for payday loans or more if it’s a personal loan. After applying for a 6 month loan, our lender partners will assess your application and either approve or decline it.
If approved, you’ll get cash in your bank account to use on whatever you need. Your loan agreement will contain the relevant repayment details. Repayments are usually taken directly from your account on every due date for six months via debit order until the debt is settled.
Lenders in South Africa are required to perform credit checks to ensure responsible lending. This will leave a small footprint on your credit score, which can easily be repaired.
However, you should avoid submitting too many loan applications in a short time. A series of hard credit checks in a short time frame will have a more significant impact on your credit score.
Reputable South African lenders don’t offer loans with no credit check because they want to make sure they give loans only to people who can afford them.
Taking a loan you can’t afford can lead to serious financial problems, so credit checks are in your best interests. The good news is that you may still be eligible even if you have a poor credit score.
Online lenders offer the fastest loan application processing times. In the best-case scenarios, decisions are made within minutes. Once approved, and you’ve signed the loan contract, you could receive the money on the same day, in as little as a few hours.
It could also take longer if the lender needs more time to verify your information and perform various checks. You may not be able to get an instant loan, but it’s possible to get an instant decision, so you know which outcome to expect.
When you apply for a 6 month loan, there’s never a guarantee that your application will be approved. Lenders look at various factors before giving out loans. For starters, you need to borrow money you can afford to pay back.
In addition, if your credit report shows a debt review flag or a history of missed and late payments, this could be why your application was rejected.
6 month loans are paid back in equal monthly instalments. Your monthly repayment depends on the loan amount, interest rate, and fees. If you miss an instalment, you may incur late payment fees and additional interest charges.
It’s essential to get in touch with your lender to discuss a payment arrangement if you feel you may struggle to meet the repayments.
Our Research Expert
Gracie Makowe is a full-time personal finance writer with 10 years of experience and a Bachelor of Commerce in Financial Management from UNISA. Learn more.