Short-term loans compared
Written byFinmart Editorial Team
What to compare before you apply
| Loans | Loan amount | Loan term | Interest rate | Age |
|---|---|---|---|---|
 Springloans | R100 – R8,000 | 62 – 120 days | 54.75% – 60% APR | |
 Cashgist | Up to R4,000 | Up to 30 days | 36% – 60% p.a. | 21+ |
 Jabulani Money | R500 – R4,000 | 62 – 90 days | 20% – 28% p.a. | |
 Bongo Credit | Up to R4,000 | Up to 35 days | ||
 Creditbar | R500 – R5,000 | 7 – 61 days | 18+ | |
 Boodle | Up to R8,000 | 1 – 6 months | Up to 60% APR | 18+ |
 Clickcredit | R500 – R8,000 | 5 – 40 days | 0.16% per day | 18+ |
 Crediwise | Up to R8,000 | 30 – 62 days | 5% – 60% p.a. | |
 Fasta Cash | Up to R15,000 | 1 – 6 months | From 3% per month | 18+ |
 LendPlus | Up to R4,000 | Up to 90 days | From 0.17% per day | 21+ |
What is a short-term loan?
Under the National Credit Act, a short-term credit transaction is a loan of up to R8,000 that must be repaid in full within 6 months. It is designed for unexpected expenses — a car repair, a medical bill, a broken geyser — not for regular living costs.
Because the lender takes a higher risk over a short period, the law allows a higher monthly interest rate than for personal loans, but it also caps the fees tightly. Loans above R8,000 or longer than 6 months are personal loans with different rules.
Key features of short-term loans
| Feature | What to expect |
|---|---|
| Amount | Usually R500 – R8,000; first-time customers often get less |
| Term | From a few days up to 6 months |
| Repayment | In one payment on payday or in up to 6 monthly instalments |
| Interest | Up to 5% per month on the first loan, 3% per month on further loans in the same year |
| Collateral | None |
| Payout | Often within minutes to a few hours after approval |
Types of short-term credit
- Payday loans — a small amount repaid in one go on your next payday.
- Instalment short-term loans — up to R8,000 repaid in 2 to 6 monthly instalments, which keeps each repayment smaller.
- Micro-loans for repeat customers — many lenders start new customers on a lower limit and raise it after on-time repayments.
- Overdrafts and credit facilities — revolving credit linked to your bank account. They are not short-term loans in the legal sense and are priced differently.
Short-term loan or payday loan?
| Payday loan | Short-term instalment loan | |
|---|---|---|
| Repayment | One payment on your next payday | 2 to 6 monthly instalments |
| Typical amount | R300 – R4,000 | R1,000 – R8,000 |
| Pressure on one month’s budget | High | Spread over several months |
| Total cost | Lower in rand, because the term is short | Higher, because service fees and interest run longer |
What a short-term loan costs
Three costs make up the price of a short-term loan, and each is capped:
- Interest of up to 5% per month on your first loan in a calendar year and up to 3% per month on further loans that year.
- An initiation fee of R165 plus 10% of the amount above R1,000, never more than R1,050 plus VAT. Many lenders quote it as “16.5% of the first R1,000 plus 10% of the rest”.
- A monthly service fee of up to R60 plus VAT, which is R69.
Boodle publishes this representative example: borrowing R6,000 over 6 months at 3% monthly interest costs an initiation fee of R765, a service fee of R69 and credit life insurance of R18 per month, giving an instalment of R1,315 and a total repayment of R7,890. FASTA’s example for R4,000 over 3 months at 3% comes to R4,952 in total.
How to apply for a short-term loan
- Compare offers and check each lender’s NCR registration number.
- Choose the amount and term, and read the representative example.
- Fill in the online application with your ID, employment and bank details.
- Share your bank statements — by upload or through secure online banking verification.
- Review the pre-agreement quote, sign electronically and approve the DebiCheck debit order in your banking app.
- Receive the money in your bank account, often within the hour during business hours.
Requirements and documents
- Be 18 or older (a few lenders set the minimum at 21)
- Have a valid South African ID; some lenders also accept permanent residents
- Earn a regular income that is paid into your own bank account
- Have a South African bank account and a cell phone number
- Pass the lender’s credit check and affordability assessment
- Your green ID book or smart ID card
- Bank statements for the last 3 months showing your salary deposits
- Your latest payslip (some lenders accept bank statements instead)
- Proof of residence not older than 3 months, if the lender asks for it
- Your bank account details for the payout and the debit order
Short-term loans and your credit record
Registered lenders report your repayment behaviour to the credit bureaus. Repaying on time builds a positive payment history and often unlocks higher limits and lower fees with the same lender. A missed payment can lead to default administration charges, collection costs and a negative listing, which makes future credit harder and more expensive to get.
Advantages and disadvantages
| Advantages | Disadvantages |
|---|---|
| Fast decision and payout | Higher cost per rand borrowed than personal loans |
| Small amounts for real emergencies | Short repayment period puts pressure on your budget |
| Fees and interest capped by law | Easy to fall into a cycle of repeat borrowing |
| Minimal paperwork with online lenders | A missed payment quickly harms your credit record |
Tips for repaying on time
- Choose a repayment date that matches the day your salary is paid
- Keep enough money in your account on the debit order date to avoid failed debit fees
- Settle early if you can — it cuts the interest and remaining service fees
- Contact the lender before the due date if you foresee a problem and ask for a payment arrangement
- Avoid taking a second loan to repay the first one
When a short-term loan makes sense
A short-term loan fits a specific situation: an expense you cannot postpone, a clear idea of how much it costs and income arriving soon that will cover the repayment. Typical examples are an emergency car repair you need to get to work, a medical bill or an urgent home repair.
It is the wrong tool when the same shortfall comes back every month, when you want to repay another loan with it, or when you are not sure your next salary can carry the repayment. In those cases a personal loan with a longer term, a payment arrangement with the creditor or advice from a debt counsellor is safer.
Short-term loans compared with credit cards and overdrafts
| Short-term loan | Credit card | Overdraft | |
|---|---|---|---|
| How you get the money | Fixed amount paid into your account | Spend or withdraw up to a limit | Negative balance on your current account |
| Repayment | Fixed dates and amounts | Minimum monthly payment | Flexible, often reviewed annually |
| Cost | Capped short-term rate plus fees | Interest on the outstanding balance, cash withdrawal fees | Interest on the overdrawn amount, facility fees |
| Best for | A one-off emergency when you have no credit facility | Planned purchases repaid within the interest-free period | Short, small gaps for existing bank clients |
Frequently asked questions about short-term loans
How much can I borrow with a short-term loan?
Up to R8,000 under the legal definition of short-term credit. First-time borrowers are often offered R500 to R4,000, with higher limits after they have repaid on time.
What is the maximum interest on a short-term loan?
5% per month on the first short-term loan in a calendar year and 3% per month on any further short-term loans in the same year, plus capped initiation and service fees.
Can I extend my short-term loan?
Some lenders allow an extension, often by paying the interest due. An extension increases the total cost, and the overall term may not exceed 6 months, so treat it as a last resort.
Do I need a payslip?
Not always. Many lenders accept 3 months of bank statements that show regular income deposits instead of a payslip.
Can I get a short-term loan on SASSA grants?
Most lenders require income from employment or self-employment. Income consisting only of social grants is usually not accepted.
How fast is the payout?
Online lenders often pay within 15 minutes to 2 hours after approval during business hours. Some pay out 24/7 through instant payments; others pay applications approved after hours on the next business day.