Updated 26.02.2023

How to Get a Personal Loan with Bad Credit in South Africa

Getting a loan is a heavy obligation which is why you must carefully consider its drawbacks in case you fail to repay it in time. Being blacklisted for having a bad credit rating can be a serious problem.

Banks and lenders will typically avoid doing business with you if you have a bad credit history. Whether it’s a personal loan, a home loan, or a vehicle finance, you will have a hard time finding an institution that will lend you cash.

What can you do if you urgently need a loan for emergency situations? How can you borrow money if you have a bad credit record? Where can you get loans guaranteed for approval even without having to undergo a credit check?

It’s not the end of the world since there’s still a way to recover from situations like these. With the help of creditors who provide personal loans even to those with bad credit records, you can slowly restore your credit rating to a good status.

ALSO LEARN: 7 Smart Ways to Improve Your Credit Score in South Africa

What are Bad Credit Loans?

A person’s credit profile is what lenders usually look into in deciding whether to approve a loan application or not. Credit scores determine the likeliness an individual can repay a debt. Those with credit scores below 500 are considered by lenders as high-risk clients who have a bad credit rating. They are assumed to have a greater probability of being unable to repay their debts on time.

The usual option for these people is to go for bad credit loans. Personal loans for those with a bad credit record are usually offered with higher interest rates and follow stricter repayment conditions. Bad credit loans also have shorter repayment terms. Many lenders don’t even allow early repayments to lessen the cost of the debt in the long run.

How to Apply for a Bad Credit Loan?

Bad credit personal loans are debt instruments offered to individuals with a low credit score. Usually, lenders don’t conduct credit checks in offering this type of personal loan. However, you have to satisfy the following conditions when applying for a personal loan:

  • You have to be a citizen of South Africa who is at least 20 years of age
  • You have a South African ID book
  • You must be employed with your current employer for at least 2 to 6 months by the time you apply for a bad credit loan
  • You must be earning a specific amount of regular income
  • A local bank account where your monthly income is deposited regularly

Lenders look for clients who are employed and have a regular source of income to make sure the loan can be repaid on time. Customers who can show proof of having a larger income than the monthly repayment of their loan contract have a higher chance of getting their application approved.

Self-employed individuals are usually barred by lenders from applying, even if they urgently need the loan. The reason behind this is that self-employed people have an unstable source of income which makes them more susceptible to being unable to fulfill the monthly repayments.

Employed individuals with bad credit scores are already considered high-risk clients. Lenders will be assuming an even higher risk if they accept clients without a fixed source of income.

Much like the usual personal loans offered by banks, repayment for bad credit loans are typically done online. Monthly repayments are automatically deducted from the bank account you’ve provided upon application.

Where to Get a Bad Credit Loan?

Looking for creditors who offer personal loans for those with a bad credit record is not that hard in South Africa. You can find a lot of bad credit loan providers online, although you have to be extra careful because many bogus lenders lurk the internet.

Here are some reliable lenders that offer personal loans to people with bad credit, guaranteed approval:

Personal loans offered by these kinds of creditors typically belong to the unsecured type of loan. This means there’s no need to provide them with a collateral just to get your loan approved. However, this is also the same reason why their loan rates are way higher than usual.

If you need a loan but you have a bad credit score, it’s better to look for secured loans offered to blacklisted individuals. They may be hard to find but they’re more affordable since you have to offer up a collateral for them to approve your application.

ALSO LEARN: Ways to Get Blacklisted Loans in South Africa


Bad credit loan providers usually offer guaranteed loan approvals even without conducting any credit check at all. However, they charge exorbitantly higher interest rates than the usual which may prove to be a debt trap to the uninformed. Be sure to fully understand their terms and assess that you can strictly comply with the contract you’ll be signing with them. If possible, only resort to this type of loan as your last option.

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