Loans for Bad Credit in South Africa: Safe Options
By MoneyToday Team • Dec 11, 2024 • 7 min read
If your bank declined your loan application because of a "low credit score" or "adverse listing", you might feel like you have run out of options.
The truth is, having bad credit makes borrowing difficult and expensive, but not impossible. In this guide, we explore which lenders accept "blacklisted" clients, how to spot a loan shark, and safer alternatives like secured lending.
First, what does "Blacklisted" mean?
There is actually no such thing as a "Blacklist" file that you are on. It is a slang term. In reality, credit bureaus (TransUnion, Experian) just hold a record of your payment history.
You pay late sometimes. Traditional banks (FNB, Absa) will likely decline you, but specialist lenders might approve you at a higher interest rate.
If you are legally under Debt Review, you cannot legally borrow money. Any lender offering you a loan is breaking the law and putting you in danger.
Where can you get a loan?
Registered Microlenders
Companies like Wonga, Boodle, or Bayport have different risk appetites than big banks. They might approve you if you have a stable job, even with a lower score.
Asset-Backed Lenders (Safest Option)
Companies like Lamna or Pawn My Car lend you money against an item you own (car, jewellery, art).
SCAM WARNING: Upfront Fees
If you see an ad saying "Blacklisted Welcome - Guaranteed Approval", be very careful.
- Never pay an "Admin Fee" or "Legal Fee" upfront. Legitimate lenders deduct fees from the loan amount or add it to your monthly repayment.
- Check the NCR Number. Every legal lender must display their NCRCP number. If they don't have one, they are a loan shark (Mashonisa).
How to fix your credit (The Long Game)
You can't delete your history, but you can build a new one.
Open a Clothing Account
Stores like Mr Price or Foschini are easier to qualify for. Buy small items and pay them off over 6 months. This builds a positive payment history.
Debt Consolidation
If you have many small debts, ask your bank about a consolidation loan. It combines everything into one payment, often at a lower interest rate, making it easier to manage.