Discount loans in South Africa
Discount loan is a loan on which the interest and financing charges are subtracted from the face amount when the loan is closed. The borrower only receives the principal after the financing charges and interest are taken out but must repay the full amount of the loan.
It is a Short-term lending arrangement in which interest amount for the entire loan period (plus other charges, if any) is deducted from the principal at the time a loan is disbursed. The borrower pays off the loan (the full principal amount) as arranged.
For example Capitec increased its unsecured loans to R230 000 from R150 000. It increased its credit offering so that its clients can get the cash they need to afford the things they really want.
Absa offers personal loans between R3 000 and R150 000 over a term of 12 to 84 months. At Standard Bank (JSE:SBK) you can qualify for a maximum loan of R120 000 if you earn R8 000 a month or more. FNB’s biggest unsecured loan on offer is also R150 000 and the maximum term is 60 months. Nedbank (JSE:NED) offers a R120 000 loan, also over 60 months. African Bank’s biggest unsecured loan on offer is for R180 000 for over 84 months.
As an example of what these unsecured loans will cost on a monthly basis. The monthly repayment for a R150 000 loan over 60 months comes to R5472.58.