Personal loans for blacklisted people

Blacklisted people often get turned away from major financial institutions that are weary of giving personal loans to people with a bad credit record. This has, of course, an effect on the personal lives of such people.

You can still get a personal loan if you are blacklisted or have a bad credit record. This is because smaller financial credit providers are more inclined to grant you a loan as they are less restricted and have more flexible policies. They are by law required to abide to the National Credit Act, 2005 (Act No. 34 of 2005) so don’t go into a financial credit provider’s office expecting them to break ethos and laws of the country.

Now, here are certain things you need to know in order to have the best chance to acquire that much needed personal loan.

  • You will certainly attract a higher interest rate because you are still considered a risk. The interest rate is one of the first things you will need to inquire on, so shop around for the best rate.
  • You have to have been permanently employed with your current employer for a period of more than 2/3 months, receive a salary into a bank account and have a salary slip.
  • Be a South African citizen.

A lot of these institutions will most likely turn you away if you are:

  • Self employed
  • A commission earner only
  • Under administration or debt review
  • Weekly or fortnightly paid
  • A Pensioner

How much can you acquire? Well, it really depends on the lender and you. Some lenders will go as far as R 200, 000 or as low as R 1000, but will depend on how comfortable you are with the interest rate they will charge you. They also will look at your own debt record. The most important thing is to make sure you can pay back these monies.

Be at the ready with documentation such as the last 3 months bank statement, South African ID, payslip and proof of residence. There are still institutions willing to grant loans for blacklisted people and your search should not end with the banks.

Debt consolidation using Standard Bank Further Advance (2nd bond)

If you have a home loan with Standard Bank you may take out what they term the Standard Bank Further Advance, which as they sort to explain as a  second bond. Just like other such loans you can use it to consolidate your debts.

Standard Bank Further Advance is a second bond that you register with Standard Bank and use to gain access to a money that you can use to pay off your debts, i.e. to consolidate your debts under one lower interest loan. Although it’s unlikely that Standard Bank will ask you what you will do with the money they might check that you will be using it wisely to avoid them getting into trouble with the NCR.

Some people confuse the Further Advance product with Re-Advance product. With Further Advance you can use the money for anything else you would like, but with the Re-Advance you use it to make alterations and improvements to your current property, but this will require that you give supporting documents like approved building plans and quotations. This is the only difference between these two products so make sure you choose the correct product so as to consolidate your debts with Standard Bank home loan.

If you would like to read more about how best to consolidate your debt please click here.

Loans for blacklisted people

National Credit Regulator

Finding a loan while you have been listed on creditors bureau’s bad books can be difficult. A person who has a bad credit record will find it difficult to find a loan for the most important things like a car loan and home loan. We will discuss what options people have in getting loans from registered credit providers.

The National Credit Regulator (NCR) was formed to fulfill the requirements of the National Credit Act 34 of 2005. The act aims to:

  • provide for the general regulation of consumer credit and improved standards of consumer information
  • prohibit certain unfair credit and credit-marketing practices
  • promote responsible credit granting and use and for that purpose to prohibit reckless credit granting
  • provide for debt re-organisation in cases of over-indebtedness
  • regulate credit information, among other details which you can read here

Although you may be blacklisted the act helps credit providers from putting people into even more debt without exercising the debt they are currently servicing. Be that as it may, you may still go and seek a loan from registered credit providers who will need to also work carefully not to put you in even more debt, or debt that you can’t service.

So, what ways can you get a loan even though you are blacklisted?

You may look for credit providers who will review your credit score and establish if even though you have a bad credit record they may be  able to lend you money. Be careful that they are registered by searching for them on NCR database. Being a blacklisted individual may also attract a higher interest rate as you are still a risk.

You may apply to consolidate three or four major debts and reduce these by hundred or thousands or Rands a month. This is because a debt consolidation loan takes one major loan for all your major debts such as personal loan and credit card loans. You now will have only one loan with a stable interest rate. You may be asked for collateral such as your home, but this will depend on your debt and credit provider.

National Credit Regulator
National Credit Regulator