R1 000 loan – what it really costs in South Africa.
See what a R1 000 loan costs, who lends it and when another route is cheaper.
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The essentials
A R1 000 loan in six points
R1 000 is one of the smallest amounts anyone borrows formally in South Africa, and the rules that govern it are not the rules that govern a personal loan. Start here.
This is short-term credit
Under the National Credit Act a loan of up to R8 000 repaid within six months is a short-term credit transaction with its own capped charges.
The cap is monthly, not annual
A registered lender may charge up to five percent interest a month on a first short-term loan in a calendar year.
Fees outweigh the interest
On R1 000 the once-off initiation fee and the monthly service fee cost more than the interest, so always compare the total rand figure.
Budget for roughly R1 300 back
One month at the legal maximum, with the capped initiation and service fees and VAT added, lands near that figure.
Our comparison starts at R5 000
For amounts this small we explain the market honestly instead of matching you, because no lender in our panel writes a R1 000 agreement.
Alternatives frequently win
A salary advance, a payment arrangement with the creditor you already owe or an existing overdraft can close the same gap without a new agreement.
Tool · Repayment calculator
What a loan costs once it runs over months
R1 000 is repaid in weeks, so there is little to calculate. The moment an amount is repaid in instalments, the term drives the cost, and this calculator shows how. Move the amount and the months and watch the total repayable change.
Each bar = one month paid
The calculation is indicative and follows the annuity principle. Your own rate is set by the lender after an affordability assessment of your income, expenses and credit record, as the National Credit Act requires.
Introduction
What a R1 000 loan actually is
A R1 000 loan is not a scaled-down personal loan. It is a different product with a different legal wrapper, and knowing that changes how you shop for it.
The National Credit Act defines a short-term credit transaction as an agreement of R8 000 or less that must be repaid within six months. Almost every R1 000 loan on the South African market falls inside that definition, which is why it is repaid in one or two instalments rather than over years, and why the charges are quoted per month instead of as an annual rate.
In practice you are borrowing for a fortnight or a month. The lender is registered with the National Credit Regulator, the money usually arrives the same day, and the full balance leaves your account by debit order on or just after your next payday. Nothing about that is unusual or improper, but it does mean the loan has to be judged on the rand cost of a few weeks, not on a headline percentage.
The legal frame
The four numbers that price a R1 000 loan
What the National Credit Act allows a registered lender to charge
Short-term ceiling
R8 000
A loan of R8 000 or less, repayable within six months, is a short-term credit transaction. R1 000 sits comfortably inside that band and follows its rules.
Interest cap
5% a month
Five percent a month is the maximum on your first short-term loan in a calendar year. Any further short-term loan in the same year is capped at three percent.
Initiation fee
R165
On a loan of R1 000 the once-off initiation fee is capped at R165 before VAT, with ten percent of anything borrowed above R1 000 added on top.
Service fee
R60 a month
The monthly service fee is capped at R60 before VAT, whatever the size of the loan. On R1 000 that single fee costs more than the interest does.
Put those four numbers together and the arithmetic stops being mysterious. Borrow R1 000 for one month at the legal maximum and you owe R50 in interest, about R190 for the capped initiation fee once VAT is added, and about R69 for the month's service fee. The total lands near R1 310, or roughly thirty percent of what you borrowed, for four weeks of credit.
That is the honest price of speed on a very small amount, and it is why the same fees look far more reasonable on a larger loan. The initiation fee barely moves as the amount rises, so spreading it over R20 000 costs a fraction of what it costs over R1 000. It is also why rolling a small loan forward is so damaging: each new agreement triggers a fresh initiation fee, and two roll-overs can cost more than the original amount borrowed.
The term explained
Micro loan.
A very small, very short credit agreement repaid within weeks.
Micro loan is the everyday name for what the National Credit Act calls a short-term credit transaction. The label covers amounts from a few hundred rand up to R8 000, repaid within six months and usually within one, and it describes a product designed around urgency rather than around price.
The design shows in every detail. Documentation is light because heavy paperwork slows a same-day payout. Decisions are automated because a human assessor costs more than the loan earns. Repayment is a single debit order because instalment schedules need administration. Each of those choices makes the loan faster and each of them makes it more expensive per rand than credit that takes a week to arrange.
None of that makes a micro loan a bad product. It makes it a specific one. Used once, for something that genuinely cannot wait until payday, and repaid on the agreed date, it does its job and disappears. Used repeatedly, it becomes an expensive substitute for income that the budget was never going to provide.
Step by step
A R1 000 loan from first click to closed account
Four stages sit between deciding you are short and closing the agreement. Open each one to see what happens, what the lender is looking at and where the avoidable costs hide.
1. Decide
Everything expensive about a small loan is decided before you open an application form. Start with the actual shortfall rather than a round figure: if the taxi fare and the electricity token come to R740, borrow R740 and not R1 000, because the interest and the service fee are charged on the balance you take. Then test whether the expense genuinely cannot wait. A school fee due in three weeks is a budgeting question, not an emergency. Finally, price the alternatives properly. An employer salary advance normally costs nothing, a payment arrangement with the creditor you already owe usually costs less than a new agreement, and an arranged overdraft you already hold is almost always cheaper than a fresh short-term loan. If none of those work, you have a real case for borrowing.
Before you apply
What a lender needs, and what strengthens your case
Registered lenders ask small amounts of paperwork for small loans, but they still ask. The left column is what the file must contain; the right column is what turns a marginal application into an approved one.
What every lender requires
The five items an application cannot be assessed without.
- South African IDGreen book or smart card
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Your identity document or smart card is the starting point of every application, because the lender is legally obliged to verify who is entering the agreement before it may grant credit.
- Proof of incomePayslip, grant or invoices
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A recent payslip is the simplest evidence, but a SASSA grant statement, a pension advice or invoices from contract work are all accepted provided the money can be traced into an account.
- Bank statementsUsually three months
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Three months of statements let the lender confirm your income and read your spending pattern. They are also what an affordability assessment is built on, so they carry more weight than the figures you type in.
- An active bank accountIn your own name
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The payout goes into your account and the repayment comes out of it by debit order, so the account must be yours. Third-party accounts are refused as a matter of course.
- Minimum age of eighteenLegal capacity to contract
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Only an adult may enter a credit agreement. Anyone under eighteen, or under administration or a current sequestration order, cannot be granted credit by a registered provider.
What improves your chances
Small, free adjustments that change the answer and the price.
- Check your credit reportFree once a year
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Each bureau owes you one free report a year, and checking your own file is a soft enquiry that never affects your score. Disputing an error takes days and can change the rate you are offered.
- Bank your incomeRather than keeping cash
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Money that never touches an account cannot be used in an affordability assessment. Depositing what you earn builds the statement history that informal and self-employed applicants are usually declined for lacking.
- Apply just after paydayNot in the last week
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Your most recent statements are read closely. Balances captured a few days after your salary arrives describe a normal month, while those from the tightest point in your cycle describe a crisis.
- Clear a small debit orderFrees up disposable income
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Every open commitment is subtracted from your income before the lender decides what you can afford. Closing one small account can quietly create the room a new application needs.
- Keep your details consistentAddress, employer, number
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Verification systems that cannot match your details send the application to manual review, which turns a same-day answer into a three-day wait. Check the spelling against your documents before you submit.
Glossary
The words on a small-loan quotation
Eight terms that appear on almost every short-term credit agreement in South Africa, in plain English.
- Short-term credit transaction
- A credit agreement of R8 000 or less that must be repaid within six months. It has its own interest ceiling of five percent a month on a first loan in a calendar year, and three percent on any further one.
- Initiation fee
- A once-off charge for setting up the agreement, capped by regulation and disclosed in the quotation. On R1 000 it is R165 before VAT, and ten percent of anything borrowed above R1 000 is added to that.
- Monthly service fee
- A recurring administration charge capped at R60 a month before VAT, regardless of how much you borrowed. On very small loans this single fee usually costs more than the interest itself.
- DebiCheck mandate
- The electronic authorisation you give through your own bank so a lender may collect its instalment. Approving it confirms the amount and the date, and it stops a collection you never agreed to.
- Credit life insurance
- Cover that settles the outstanding balance if you die, become disabled or lose your job. A lender may require cover but may not force you to buy its own policy if you already hold a suitable one.
- Pre-agreement quotation
- The document setting out the rate, every fee, the instalment and the total cost of credit before you sign anything. By law it remains binding on the lender for five business days.
- Small agreement
- A credit agreement with a principal debt of R15 000 or less. Every R1 000 loan is one, which matters because no early settlement charge may be levied on agreements in this class.
- Reckless credit
- Credit granted without a proper affordability assessment, or granted when the consumer clearly could not repay it. A court may suspend or set aside such an agreement, which is why registered lenders insist on statements.
Understand these eight and nothing in a R1 000 quotation should catch you out.
Be honest with yourself
When R1 000 is the wrong fix
A short-term loan solves a timing problem: money is needed now and income arrives shortly. It cannot solve a budget problem, where the month costs more than it pays.
The clearest warning sign is repetition. If R1 000 has been borrowed in each of the last three months, the loan is no longer covering an emergency, it is covering a gap that returns every payday. Each new agreement carries a fresh initiation fee, so the shortfall grows slightly every time it is postponed. What helps at that point is a written budget, an honest conversation with the creditors you already owe, or free advice from a registered debt counsellor.
Borrowing to repay another short-term loan deserves particular caution. It is the classic first step of a spiral, because the new agreement is priced from scratch while the old problem is untouched. So does borrowing for something that could genuinely wait a fortnight, where the premium buys impatience rather than a solution.
None of this makes small credit irresponsible. Used once, for a real emergency, on the shortest term you can carry, it does exactly what it was designed to do. The damage begins when it is treated as income instead of as credit.
Jacob Hartmann
Jacob has checked the cost breakdown for a R1 000 loan against the NCA caps, so readers can see exactly what the smallest formal credit costs.
Tool · Cost breakdown
See where the cost of a loan comes from
Move the amount, the rate and the fees and watch the annual percentage rate rebuild itself. It shows plainly why a fixed initiation fee is heavy on a small, short loan and almost invisible on a larger one.
APR
The calculation is indicative. Short terms make once-off fees look dramatic in percentage terms even when the rand amount is modest, which is exactly why small loans should be compared on total cost rather than on APR alone.
Your situation
Borrowing R1 000 in five common circumstances
Very few people applying for R1 000 have a clean payslip and a spotless record. Here is what realistically applies when your circumstances sit outside the standard case.
01Your income is a SASSA grant
Grant income counts, and so do the protections.
1 min
A grant is regular, verifiable income, and several registered lenders will advance small amounts against it. The affordability assessment applies exactly as it does to a salary, so the offer will be modest. One rule matters above all others here: no lender may keep your SASSA card, your bank card, your PIN or your identity document as security. That practice is illegal, and anyone requesting it is operating outside the Act entirely.
02You have no payslip
Bank statements do the work instead.
1 min
Contract work, informal trading and freelance income are all acceptable, provided the lender can see them. Three months of statements showing a consistent pattern of deposits carry more weight than any letter, and invoices or a recent tax assessment strengthen the picture further. The practical step is to bank everything you earn rather than holding it in cash, because income that never enters an account cannot be counted.
03Your credit record has defaults
Impaired records are not an automatic refusal.
1 min
Short-term lenders price for risk rather than screening it out, so a default or a judgment rarely ends the conversation on an amount this small. Expect a shorter term and the maximum permitted charges. Repaying exactly as agreed is worth more than the loan itself, because every instalment is reported to the bureaus and recent behaviour is what moves a profile back into cheaper territory.
04You already have a short-term loan running
A second one is where spirals begin.
1 min
Taking a new loan to cover an existing one is the single most expensive move available to you, because the second agreement carries its own initiation fee while the first problem stays exactly where it was. Speak to the current lender first. Rearranging an instalment costs a fraction of a new agreement, and a registered lender would rather restructure than write off.
05You need more than R1 000
Above R5 000 the market changes shape.
1 min
Once the amount passes a few thousand rand, a personal loan repaid in instalments almost always beats short-term credit, because the rate is annual rather than monthly and the fixed fees are spread across a longer term. That is the point where comparison genuinely pays, and where a single free application through Swiftbanker reaches several NCR-licensed lenders at once.
Weighing it up
The honest case for and against a R1 000 loan
Small credit is neither a trap nor a bargain. It is a fast, expensive tool that suits a narrow set of situations, and the balance below is worth reading before you apply.
Pros
- Fast enough to matter.
Applications take minutes and approved money often arrives the same day, which is the whole point when a prepaid meter is empty.
- Charges are capped by law.
Interest, the initiation fee and the service fee all have legal ceilings, and every registered lender answers to the National Credit Regulator.
- Light on paperwork.
An ID, proof of income and three months of statements are usually enough, which keeps the product open to informal and grant income.
- It ends quickly.
One debit order closes the agreement within weeks, so a small loan repaid on time leaves a clean record rather than a lingering commitment.
Cons
- Expensive per rand borrowed.
Around thirty percent of the amount in charges for a single month is the standard price of this product, not an outlier.
- Fixed fees hit hardest here.
The initiation fee is nearly the same on R1 000 as on R5 000, so the smaller the loan the heavier that charge weighs.
- Roll-overs compound fast.
Each replacement agreement triggers a fresh initiation fee, which is how a one-month shortfall quietly becomes a six-month debt.
- One missed debit order costs.
A returned instalment brings penalty charges, a second collection attempt and a bureau listing that outlasts the loan by years.
One rule worth remembering
Compare the rand cost, never the percentage
On a loan this small, percentages mislead in both directions. Five percent a month sounds gentle and is not; an APR in the hundreds sounds predatory and is largely an artefact of a four-week term. The only figure that tells you the truth is the total rand amount the lender will collect, on which date, and what happens if it is not there. Ask for that number in writing before you sign, and compare it against the cost of simply waiting two weeks.
Worth knowing
Six rules that protect small borrowers
Details in the credit rules that most people meet too late.
- Fact 01
The second loan costs less in interest
The monthly cap drops after your first one.
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Five percent a month applies to your first short-term loan in a calendar year. Any further short-term loan in that same year is capped at three percent a month, though a new initiation fee still applies to each agreement.
- Fact 02
Early settlement carries no penalty
Small agreements may not be charged for it.
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On a credit agreement of R15 000 or less no early settlement charge may be levied. Paying the balance the day the money arrives simply stops the interest, so any spare cash belongs there before anywhere else.
- Fact 03
You must approve the debit order
DebiCheck runs through your own bank.
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A DebiCheck mandate is authorised electronically by you, through your bank, before the first collection. It confirms the amount and the date, and it means a lender cannot quietly increase what it takes from your account.
- Fact 04
Your credit report is free once a year
Each bureau owes you one annually.
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Requesting your own report is a soft enquiry that never affects your score. Reading it before applying lets you correct errors and see precisely what the lender will see when it assesses you.
- Fact 05
The quotation is binding for five days
Time to compare, by law.
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A pre-agreement quotation must set out every cost before you sign, and it stays binding on the lender for five business days. Nothing obliges you to accept it on the spot, whatever the urgency of the sale.
- Fact 06
Complaints have somewhere to go
Two free routes exist when a lender misbehaves.
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You can complain to the National Credit Regulator, or to the National Financial Ombud Scheme, which took over the work of the Credit Ombud. Both are free, and registered lenders know their conduct can be reviewed.
Know the risks
Six ways a small loan turns expensive
Almost every bad outcome on an amount this small comes from one of the six habits below rather than from the loan itself.
- Borrowing from an unregistered lender. Without an NCRCP number there are no capped charges, no affordability protection and no regulator to complain to when the terms turn hostile.
- Handing over a card, a PIN or an identity document. Holding these as security is illegal in South Africa, and a lender who asks for them will not be following any of the other rules either.
- Rolling the loan forward. Replacing one agreement with another restarts the initiation fee and the service fee, which is how a single month of shortfall becomes half a year of repayments.
- Rounding the amount up. Borrowing R1 000 when you needed R700 costs you interest and fees on money you never required, and the extra rarely survives to the end of the week.
- Letting the debit order bounce. Penalty charges, a second collection attempt and a bureau listing all follow within days, and the listing outlives the loan by several years.
- Applying to five lenders at once. Every formal application leaves an enquiry on your credit file, and a cluster of them reads as distress to the next lender who looks.
Cut the cost
Eight ways to pay less for a small loan
None of these cost anything to do, and together they change both the price you are quoted and the odds of being approved at all.
Borrow the exact shortfall
Work out the real figure to the rand and ask for that, because charges apply to what you take.
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A round number feels tidier but costs more. Interest and the monthly service fee apply to whatever you borrow, and the surplus almost never survives the week it arrives. Write down the actual expense, apply for that amount, and let the tidiness go.
Ask your employer first
A salary advance is usually interest free, and payroll departments arrange them far more often than people expect.
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Many South African employers will advance part of a salary already earned, deducting it from the next payment at no cost. It takes one conversation, leaves no mark on your credit record, and is the single cheapest source of a thousand rand available to most employed people.
Phone the creditor you already owe
A rearranged due date on an existing bill is nearly always cheaper than a new credit agreement.
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Municipalities, schools, insurers and lenders all prefer a late payment they know about to a default they discover. A two-week extension or a split payment costs a small administration charge at worst, while a fresh loan costs an initiation fee, a service fee and interest.
Verify the NCRCP number
Check the registration on the National Credit Regulator's public register before you type in a single detail.
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Registered credit providers display an NCRCP number, usually in the website footer, and the register is searchable by anyone. If the number is missing, or does not match the trading name, none of the caps or protections in this article apply to the agreement you are about to sign.
Time the debit order to payday
Set the collection date for the day after your salary lands rather than accepting the default date.
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Most lenders will set any date you ask for at the outset, and almost nobody asks. Collecting the day after income arrives means the money is genuinely there, which removes the single most common cause of penalty fees and bureau listings on small agreements.
Settle the moment you can
No early settlement penalty may be charged on a small agreement, so paying sooner simply costs less.
Read moreHide
On agreements of R15 000 or less the law prohibits an early settlement charge. If money arrives ahead of the due date, clear the balance immediately: the interest stops, the service fee stops accruing, and the account closes cleanly on your record.
Bring your own credit life cover
A lender may insist on cover but cannot insist that you buy the policy it happens to sell.
Read moreHide
Credit life insurance is often bundled into the instalment, and the premium is rarely the cheapest available. You are entitled to substitute a suitable policy you already hold, which on a longer agreement can save more than negotiating the interest rate would.
Compare properly above R5 000
Once the amount rises, one free application reaches several lenders and the price gap becomes worth chasing.
Read moreHide
Short-term credit is priced almost identically across the market because the caps do the pricing. Instalment lending is not: two NCR-licensed lenders can quote very different totals for the same profile, which is where a comparison through Myloan.co.za earns its keep.
About Swiftbanker
Free comparison, and no loan of our own to sell
Swiftbanker is an independent comparison service for the South African credit market, and it is free for you to use. We are not a lender, and we take no part in deciding your application. When you apply, the application is handled by our partner Myloan.co.za, a leading South African loan marketplace, which matches your profile against multiple NCR-licensed lenders and brings their offers back to you.
Our comparison covers amounts from R5 000 to R350 000 over three to 72 months. R1 000 sits below that floor, which is why this page explains the market rather than pointing you at a form. We would rather tell you that a salary advance or a payment arrangement is cheaper than pretend we have a product for every situation.
We are paid a commission by lenders on loans that are actually paid out. You never pay us anything, and the commission does not change the rate you are offered. Everything here is general information rather than financial advice: check any lender against the National Credit Regulator's register, read the quotation before you sign, and only enter an agreement you are confident you can repay.
FAQ
R1 000 loan questions, answered
The questions South Africans ask most often before borrowing a small amount, answered plainly and without sales language.
How much does a R1 000 loan cost in total?
Budget for roughly R1 300 if you repay after one month at the legal maximum. That is R50 in interest, about R190 for the capped initiation fee with VAT, and about R69 for the month's service fee. A lender must show you the exact total in writing before you sign.
How quickly does the money arrive?
Usually the same day. The application takes minutes, automated systems decide in minutes for straightforward cases, and payment normally reaches your account within a few hours of acceptance. Anything that needs a human assessor, such as irregular income, adds a day.
Can I get R1 000 with a bad credit record?
Often yes. Short-term lenders price for risk rather than screening it out, so a default does not automatically end the application. Every registered lender must still assess whether you can afford the repayment, and any promise of guaranteed approval without checks is a warning sign.
Does Swiftbanker offer R1 000 loans?
No. Our comparison starts at R5 000 and runs to R350 000 over three to 72 months, so no lender in our panel writes an agreement this small. This page exists to explain the rules and the alternatives honestly rather than to send you somewhere unsuitable.
What documents do I need?
Typically your South African ID or smart card, recent proof of income such as a payslip or grant statement, three months of bank statements and an active bank account in your own name. No registered lender may hold your card, PIN or ID as security.
Can I repay early without a penalty?
Yes. A R1 000 loan is a small agreement under the National Credit Act, and no early settlement charge may be levied on agreements of R15 000 or less. Settling as soon as the money is available stops the interest and closes the account cleanly.
What happens if the debit order bounces?
The lender may add a penalty charge, attempt a second collection with its own cost, and report the missed payment to the credit bureaus. Telephone before the debit date if you can see trouble coming, because rearranging a date costs far less than defaulting.
Is there a cheaper way to find R1 000?
Frequently. A salary advance from your employer is usually free, a payment arrangement with the creditor you already owe costs little, and an arranged overdraft you already hold is cheaper than a new agreement. Try those three before borrowing.
Other amounts
Looking for a different amount?
Each amount has its own guide with worked examples of the instalment, the total cost and what lenders look for at that level.
Up to R8 000: R500 · R1 500 · R2 000 · R3 000 · R4 000 · R5 000 · R6 000 · R8 000.
R10 000 to R80 000: R10 000 · R15 000 · R20 000 · R25 000 · R30 000 · R40 000 · R50 000 · R60 000 · R70 000 · R80 000.
R100 000 to R350 000: R100 000 · R150 000 · R200 000 · R250 000 · R300 000 · R350 000.
In short
A R1 000 loan is short-term credit, not a small personal loan. Under the National Credit Act any agreement of R8 000 or less repaid within six months carries its own capped charges: up to five percent interest a month on your first such loan in a calendar year, an initiation fee of R165 before VAT on R1 000, and a service fee of up to R60 a month before VAT. Add those together and one month of credit costs around R310, so you repay roughly R1 300. That is the honest price of same-day money on a very small amount.
Because the fees are fixed rather than proportional, they weigh far more heavily here than on a larger loan, and every roll-over restarts them. So the sensible moves are always the same: borrow the exact shortfall rather than a round number, check the lender's NCRCP registration before you share anything, set the debit order for the day after payday, and settle early if the money arrives, since no penalty may be charged on a small agreement. Before any of that, test the alternatives. A salary advance, a payment arrangement or an existing overdraft solves the same problem for a fraction of the cost. Above R5 000, where instalment lending starts and prices genuinely differ, one free application through Swiftbanker reaches several NCR-licensed lenders at once.
Need more than R1 000?
Compare loan offers from R5 000 upwards
One free application, offers from multiple NCR-licensed lenders, and no obligation to accept any of them. See what you qualify for in a few minutes.
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