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Apply for a R250 000 Loan Online in South Africa

Apply for a R250 000 Loan Online in South Africa

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If you’re looking to borrow a large amount of money – such as a R250,000 personal loan – it’s more important than ever to evaluate your options carefully.

Here’s what you need to know before you apply for a loan of R250,000.

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Need a R250K Loan? Here Are Your Options

A loan for R250,000 could be a personal loan, debt consolidation loan, or business loan. Let’s look at each option in detail.

Personal Loans

A personal loan of this size is often the highest amount on offer, so it’s considered a relatively large amount. 

Personal loans up to R250 000 typically have long terms of up to six years or more. When you’re approved for such a loan, the lender issues the money into your bank account, minus upfront fees, as a lump sum.

Personal loans generally have no spending restrictions. You can use the funds on just about anything you deem worthwhile. 

Top reasons for taking out R250 000 loans among South Africans include home improvement or renovations, appliance purchases, vehicle financing, wedding expenses, and paying for tertiary education or relocation costs. 

Besides the fact that personal loans are versatile, another good reason to borrow is that these loans offer low interest rates. 

Combined with the flexible loan repayment terms, you can spread out costs without putting pressure on your budget. This makes it a smart way to borrow cash.

Consolidation Loans

A R250 000 consolidation loan can be a great way to manage your finances and stay in control of your debt. 

Debt consolidation loans offer South African residents an opportunity to combine multiple debts into a single payment. The process involves using a low-interest loan to pay off your existing debts that have a high interest rate. 

Types of debts you can consolidate with a R250,000 loan include credit card debt, clothing accounts, payday loans, student loans, and other smaller personal loans. 

If you use one large loan to pay off smaller debts, you’ll be left with a single loan that requires one monthly payment. 

One of the first steps to debt consolidation is to add up your debts to ensure that R250 000 is sufficient to cover the outstanding balances. 

Keep in mind that a R250,000 consolidation loan only makes financial sense if you can’t afford the new loan payments. 

If taking out a new consolidation loan ends up increasing your borrowing costs, this could lead to further financial difficulties.

Business Loans

If you’re a business owner looking for a small business loan, a loan this size should be enough to cover various expenses. 

The list includes equipment and inventory purchases, marketing and advertising, payroll, real estate, and cashflow for everyday expenses. 

Getting approved for a small business loan can be tricky, but it’s possible to find alternative lenders willing to assist. 

Requirements for R250K business loans include good business and personal credit scores: A higher credit rating will increase your chances of getting approval and a better interest rate. 

Financial services providers will also want to know how long you have been in business, your annual/monthly revenue, and whether you operate in a risky environment. 

Statistics show that most companies close within the first five years of opening. Remember, lenders are always focused on your payment ability and the likelihood that you will stick to your loan agreement. 

Be sure to provide any required personal and financial records, such as tax returns, financial statements, and your business plan to prove your company’s creditworthiness.

Where to Get a R250 000 Personal Loan

Once you have decided you need a R250 000 loan, there a few options to consider when it comes to lenders.

Online Lenders

Online lenders are now one of the best sources for finding a large personal loan. 

These financial services providers use technology to compete with traditional financial institutions, by offering an easy, convenient online application process and fast lending decisions. 

That said, it may be challenging to find more than a few online lenders with high borrowing limits. For example, popular lenders like Capfin only offer loans of up to R50 000.

Banks

Some major banks like Capitec, FNB, and African Bank offer large personal loans. For example, African Bank has a maximum limit of R350 000 on their personal loans. 

So, you might be able to borrow the loan amount you need. If you bank with any of the big banks, it can be helpful to ask about your eligibility. 

The advantage of getting credit from your bank is that funds can be deposited into your account quickly and easily. 

However, the process may be a hassle if you’re required to visit the bank branch in person to complete your personal loan application.

If you’re looking for a R250,000 loan in South Africa with a bank or online lender, here are some of the top options for getting the cash you need.

Loan AmountsLoan TermsInterest Rate
RCSR2 000 to R250 00012 to 60 monthsFrom 15%
SanlamR5 000 to R300 00012 months to 6 years16% and 29.25%
Direct AxisR5 000 to R300 00024 months to 72 months29.25% maximum
African BankR2000 to R350 0007 to 72 months15% to 24.50%

Can You Get a R250 000 Personal Loan With Bad Credit?

Getting a R250,000 loan with bad credit can be, no doubt, a challenge. Think of how lenders work. 

Every time they give out credit, there’s always the risk that the borrower might not pay back the money, which means loss. 

So lenders try as much as possible to reduce the risk they face. The risk is especially greater with unsecured loans because there’s no asset to repossess if the borrower defaults. 

To reduce the risk, lenders will look at your creditworthiness. They run credit checks to understand past payment behaviour and determine the likelihood of you repaying the debt on time. 

If you have poor credit, lenders might not want to deal with the risk of you defaulting. However, some lenders have less stringent borrowing criteria, and consider alternative factors like whether you have stable employment and a sufficient monthly income. 

But, they’ll likely charge a high interest rate to offset the risk. In addition, they might limit how much you can borrow again to reduce the risk they face. 

If you’re looking for a loan for up to R250,000 and want to improve your chance of approval, consider boosting your credit score first or pledging collateral to reduce the lender’s risk.

Pros and Cons of Getting a R250K Loan

It helps to weigh the advantages and disadvantages of getting a R250K loan to determine whether taking a large loan of this size is worthwhile. 

The good news is that with the right loan, the benefits can outweigh the costs.

PROS

  • High ROI. A R250 000 loan can offer a good return on investment. For example, you can invest in home improvements to boost the value of your property. You can also use the funds to expand your business and increase revenue or pay for your education to position yourself at the top of the job market.
  • Flexible Uses. Most providers allow borrowers to spend the money however they would like. With flexible and personalised loan spending, you can use the funds in the best way to suit your financial situation.
  • No collateral. Most personal loans are unsecured. This makes for a simpler and faster online application process. You’ll also have more peace of mind from knowing your valuable assets are not at risk if you default.
  • Fixed terms. Large personal loans are instalment loans. So you get a lump sum, which you can pay back over a fixed term. The fixed interest rate means you’ll always know how much each loan repayment costs and can budget accordingly.
  • Competitive rates. If you’re a better qualified borrower with a good interest rate, you may get a lower interest rate. Large personal loans equal large borrowing costs, and a low interest can significantly reduce the overall cost of your debt.

CONS

  • Increased debt burden. When you take a large personal loan, your debt burden increases significantly. Regardless of the loan term you choose, you’ll have to deal with high monthly payments and increased interest costs. It’s only worth it if you can justify the loan and afford the monthly repayments.
  • Strict requirements. You’ll need to be a well qualified borrower to get approved for a loan this size. An excellent or good credit score and a high income level are often a must.

How to Apply for a R250 000 Loan

Getting a R250,000 loan is easier if you have a better understanding of how the lending market works. Randwallet can help you through the process. 

Follow these tips and steps if you’re ready to apply for a loan online.

Step 1: Compare Loan Offers

You can prequalify by filling in the loan comparison form. You’ll get loan offers from RandWallet’s lender partners who are all registered credit providers. 

Compare these offers by considering factors, such as the interest rate, fees, repayment terms, the size of your monthly payment, and the total cost.

Step 2: Choose a Lender & Apply

Once you compare lenders and pick a loan option, it’s time to complete a full loan application. You’ll need to provide the required documents, such as your latest bank statements and payslips. 

Step 3: Sign the Loan Contract

If you have excellent credit, a reliable monthly income, and a low debt-to-income ratio that indicates you can comfortably afford the payments. So, you should have no trouble getting approved. 

If approved, the lender will ask you to sign a loan agreement, after which you get your funds. It usually takes one week or less to get the cash in your bank account.

Other Cash Loan Amounts

»MORE: Cash loans in South Africa

Frequently Asked Questions

What is the largest personal loan you get?

The majority of South African lenders limit the amount you can get to around R250,000. However, a few lenders offer personal loans up to R300 000 or R350 000.

What credit score do you need for a R250K personal loan?

Large loans up to R250,000 are usually reserved for borrowers with excellent credit. This means a score of at least 700 or higher. 

A good or excellent credit score shows the lender that you’re more likely to pay off your debts on time, which boosts your odds of approval.

How much income is needed to get a R250 000 business loan?

Business loan lenders typically let you borrow between 10% and 30% of your annual revenue. So if your business earns at least R2.5 million, you could potentially qualify for a R250K business loan.

How much do I pay a month for R250 000 loan?

R250 000 repayments depend on the interest rate, fees, and repayment period. The interest rate for a R250 000 loan in South Africa can be as low as 12% and the maximum repayment period is usually 72 months.

REPRESENTATIVE EXAMPLE: Suppose you take out a R250 000 personal loan over 3 years at an interest rate of 12.75%. How much you’ll pay back each month: R9,474.11. How much you’ll pay back in total: R341,067.96. Fees include an upfront initiation fee of R1,207.50, plus a monthly service fee of R69.

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.