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You are at:Home»Uncategorized»Getting a loan in Grahamstown
Uncategorized

Getting a loan in Grahamstown

Grocott's MailBy Grocott's MailAugust 17, 2012No Comments3 Mins Read
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 While the count of formal banks comes to seven, excluding GBS Mutual Bank, African Bank and Capitec, the number of informal lenders amounts to dozens.

 While the count of formal banks comes to seven, excluding GBS Mutual Bank, African Bank and Capitec, the number of informal lenders amounts to dozens.

Many of these loan shops have been around for years, whereas others have been around for less than a year. The youngest is a month old. Those who go to the non-commercial loan banks are those who usually would not qualify for a loan. Many are either unemployed or so deep in debt that commercial banks would not consider them viable borrowers.

Bridge Loans, formerly Multi Loans, in High Street, is one such outlet. Beyond loans, they offer insurance and funeral cover, among other services. “We offer six- to 12-month loans,” said Riaan Stander, managing supervisor. Six-month loans are charged at 60% interest and 12-month loans at 36%.

“If customers are unable to pay off the loans at the agreed time, they simply need to come to us and we can work something out,” said Stander.

Bridge Loans requires that you must have been employed for at least three months, and must not be under administration or review. Blacklisted clients can still get a loan. Loan approvals are relatively quick and are dependent on individual circumstances.

“It can take up to 15 minutes for your loan to be approved and you can get paid out within the next 24 to 48 hours,” says Stander.

Not all non-commercial lenders are the same. Take GBS Mutual Bank, for instance. At 135 years, it is the oldest bank in town. Their general function is investments and loans. Money loaned is based on what the person has for security.

What this means is that if you do not have collateral, you cannot get a loan. They also do not loan start-up businesses. Interest rates are based on prime, which is the risk of the borrower. “We also offer savings services,” says John Stapleton, general manager of GBS Mutual Bank. Depending on your risk profile, loan approval is almost immediate.

Then there are the more commercialised loan banks like Capitec Bank and African Bank. African Bank offers unsecured credit, what this means is that one does not need collateral to get a loan. However, you must be employed.

If employed on contract, it is in the client’s best interest that they notify the bank, because the loans need to be paid back before the contract date. Interest rates are determined by the individual’s profile, but will not go above 32%. “If clients can’t pay on time, they must come as soon as possible so pay arrangements can be made,” says Hendry Mkhonto, manager of the Grahamstown branch.

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