Updated 27.01.2023

Short-term Cash Loans

Are you short of cash that you won’t last until your next payday? Or maybe you’re in an emergency situation wherein you need additional cash to pay the medical bills of a family member? Whichever the case is, your need is the same: additional cash that you can get in the shortest time possible.

Short term loans have similarities with personal loans but are usually borrowed for less than a year. This kind of loan has high-interest rates because they are unsecured and pose a high risk to the lender. The high-interest rates ease the lenders underwriting worries. Short-term loans are quick to process and are issued a few minutes or hours after application. The money is deposited into your account after approval, and you can withdraw within the same day.

Short-term cash loans are credited into your deposit account every month until the lender recovers the total amount of the loan, inclusive of interest and additional fees. The loan is available to every South African, including those that boast poor credit history. 

Who Can Apply for the Short Term Loans South Africa?

Different lenders have different requirements and criteria for who qualifies for a short-term loan in South Africa. However, every creditor requires that:

  • You are a South African resident
  • Employed or self-employed with a regular monthly income of at least R 3000.00
  • Boast 18+ years
  • You have a bank account either with the lender or any other bank

How to Apply for the Short Term Loans South Africa

Short term cash loan application is easy. With advanced technology, widespread internet use, and smartphones in South Africa, you can apply for a short-term loan online. Many lenders boast of easily navigable websites that allow you to apply for loans online. The loan website pages boast of loan calculators that indicate the amount you will repay, including additional fees and interest charges within a specific time.

Most Short-term credit lenders require only basic information about the borrower. They ask for

  • National ID
  • Monthly earnings
  • Monthly expenses
  • Employment details
  • Six months bank statement
  • Six months’ payslip

Some lenders may require you to apply for the short-term loan online and submit the above documents physically to them for proper check and documentation.

How Short-Term Loans Work in South Africa

South African creditors boast of simple requirements mentioned above to approve your loan. Most short-term loans go without credit cheques as most lenders focus on your monthly salary that gets deposited into your account in their bank.

When it comes to payments, you have to repay within the stipulated time, after every month. However, some creditors give you time extensions to repay your loan with a little penalty on top. As earlier mentioned, this is the best type of loan for people with poor credit ratings and those blocked to borrow long-term loans. Provided you have a constant monthly income and a deposit account with your lender, and you automatically qualify for a short-term cash loan.

Types of Short-Term Loans in South Africa

The creditor in South Africa offer short-term loans in the following forms:

Payday Loans

Payday loans are the most common short-term loans in South Africa. They involve small amounts of cash starting from R3,000. These kinds of loans are easy to borrow, and the best part is that they are deposited into your account within the same day of application. However, they come with very high-interest rates with short payment duration. As the name suggests, payday loans involve the deduction of the loan amount automatically from your salary account.

It is advisable to check your repayment capability before applying for a payday loan. Note that late payment results in hefty penalties. It would help if you also did proper research on the best payday loans providers in the country. Choose the one that charges the least interest rate with minimal additional fees.

Suppose you cannot afford to repay your loan because of salary delay or reduction. In that case, you should immediately inform the lender and determine if they can give you a grace period or rollover your outstanding amount. In this case, rollover means making a new agreement for the repayment of the remaining cash. However, note that when your loan is rolled over, the lender charges you more interest, additional charges.

Lines of credit

Another form of short-term cash loan for businesses in South Africa is the lines of credit. 

Lines of credit boasts of a present borrowing limit that businesses can tap into at any time. They behave like business credit cards to use the funds up to the limit stated and then repay later with interest. The credit may come from a bank or a credit union that you boast membership in. This is an unsecured loan that you can use in emergency cases or for any purpose. Once you repay the loan on time, you can borrow against your card again.

Merchant Cash Advance

A merchant cash advance is a short-term cash loan that was recently launched in South Africa. It is an ideal loan for businesses that allow their customers to pay via credit cards. It attracts loans that are based on the business’s monthly turnover. So, the higher your sales, the higher your loan amount. Your monthly sales also determine the repayments. That means that you repay a higher amount on a good month, and on a bad month, you repay less until your total loan is fully repaid.

This is the best short-term loan for sellers because:

  • It is easily accessible
  • Does not need a lot of documentations
  • Do not require you to have a great credit score
  • The loan is unsecured and doesn’t tie up your assets
  • It perfectly suits your business cash flow
  • It boasts very low interests
  • You can access up to a maximum of R 2 million in a day.

Online Short-term Loans

Thanks to advanced technology and widespread internet use in South Africa, you can easily access a short-term online loan from your phone, tablet or computer. There are hundreds of online creditors, including banks and microfinance companies. They involve a simple application process where you must fill in your full name, location, ID number, account number and the amount you wish to borrow.

These kinds of loans are immediately deposited into your bank account after approval. Repayments are deducted from your deposit account at the agreed dates.

Invoice Financing

This is a short-term loan for supporting businesses as they wait for invoice payments from their clients. That means business owners secure short-term loans using unpaid invoices. When the customer pays the debt due, the lender automatically deducts their money.

How Much Is A Short-Term Loan?

The cost of a short-term loan depends on the amount borrowed and the duration. The interest rates charged plus additional fees and penalties also contribute to your repayment amount. However, interest rates on short-term cash loans vary from lender to lender.

Most online short-term lenders in South Africa charge higher interest rates compared to banks and credit unions. Yet, if you boast a bad credit history, the banks may charge you a very high-interest rate.

The good thing is that the South Africa Reserve Bank has placed a limit on the maximum interest at 22% that creditors can charge on an expensive short term cash loan.

Tips for Finding the Best Short-Term Loans

Finding the best short-term cash loan lenders in South Africa is overwhelming but worth the search. You have to do deep research on all lenders you are interested in and choose one from the best. This way, you will escape hefty interest rates and fake loans. Here are a few tips you can use to look for the best short-term loans.

Lending Techniques

Different lenders boast different lending criteria, but the most common ones are the documents they ask for. As earlier mentioned, a genuine lender will ask for your name, age, address, ID, payments slip and bank statements. If you come across a lender that does not bother asking for these details, do not work with them. Chances are they are fraudulent.

Genuine Website

With technology advancement and widespread internet use, almost all creditors in South Africa boast websites. Their websites make it easy for you to find all the information you need concerning a lender. Such websites should boast easy navigation with clear graphics and detailed information.                                                                                                    

Ensure that the lender’s website can protect your details from theft from a malicious third party. However, if you come across a lender’s website without the prefix “https”, avoid registering with them. If it lacks this prefix, then the lender is fake.

Check Lenders License 

Every creditor in South Africa should boast a license from the SARB with the number displayed on their website. Always look for this number from your creditors and avoid borrowing from unlicensed lenders.

Check the Loan Fees, Penalties and Interest Rates

A good lender discloses all their fees, penalty rates, and interest rates to potential customers on their website. You should have a chance to review the fees and interests and ensure that you can afford the total amount you want to borrow.

Ensure that you choose a creditor with fair monthly charges, fees and interest rates. This way, you will not incur penalties or get blocked for defaulting on a loan.

Customer Service

A company’s customer service is important and is one of the main things people look at before transacting with the creditor. Many lenders in South Africa boast 12-hour customer service for six days a week. Various websites list the customer care phone number and email on their website, and others even boast of a live chat. Besides availability, lenders should have professional and experienced customer care agents that can handle all your queries calmly and correctly.

Customer Review

Before you borrow a loan with a particular lender in South Africa, ensure that you check customer reviews. If you find many former customers referring to potential buyers and others praising the lending company, you can consider borrowing from them. If the reviews boast negative comments, stay away from the lending company.

Overdraft Agreement

An overdraft agreement allows you to borrow when your business settles payments from its current account and surpasses the available balance. This kind of loan is a great way for financing your business in fluctuating times. The loan is provided on a fixed time or a rolling basis without an end date.

There are two types of overdraft loans in South Africa, including:

Authorized Overdraft

 Involves a pre-agreement with the creditor, which is offered at a lower interest rate.

Unauthorized Overdraft

There is no set agreement between the lender and the borrower. This is a risky overdraft and always incurs charges for the business.

Overdraft agreements boast of available cash that you can borrow anytime you run out of cash. It is ideal for temporary financial problems and emergencies. This kind of loan gives you control over your loan since it has a maximum borrowing limit. You can either increase or decrease your borrowing provided you do not exceed the borrowing limit.

Besides, this is one of those small-term cash loans where you only pay for what you use. The creditor links the prime interest rate to the interest rate. That means if the prime interest drops, you benefit from low payments and vice-versa. The loan also comes with zero monthly charges. You can borrow up to R500 of the overdraft loan with zero initiation fees or monthly service fees. 

The best thing is that you can ensure your overdraft. If you are unable to settle your debt, the insurance company can come through for you and settle payments on your behalf. However, like any other loan, failure to pay your overdraft loan regularly may lead to your credit score damage. That means you might have to borrow at high-interest rates and provide collateral for your next borrowing as security.

Top Providers of Short-term Loans in South Africa

There are many short-term loan providers in South Africa. However, you might want to go with those that have a solid reputation in the lending industry. Take a look at some of them on the list below:

Advantages and Disadvantages of Short-term Loans In South Africa

Short-term cash loans in South Africa have many benefits since they are borrowed for a short period, like 12 months. Here are some of its advantages and disadvantages.

The benefits of short term loans include:

Low-Interest Rates

Short term cash loans are meant for short duration and do not attract high interest. The lender only imposes high-interest charges on borrowers with bad credit histories.

Easy to Borrow

If you are a business owner, this is the easiest loan you can borrow for an emergency. You can either take an overdraft loan or an installment or an unpaid invoice loan. Note that the creditor requires very little information about you when borrowing this loan.

Quick Deposit

Short term cash loans are deposited into your account within 24 hours after application. This is a small amount of loan that starts from R 500, and the lender does not need much time to process the small loan.

No Strict Requirements

Most short-term cash loan lenders do not check your credit score before giving you a loan. This kind of loan involves small amounts of money that many South Africans can repay on due time. 

Improve Credit Score

If borrowed and repaid on time, short-term cash loans can help build your credit score. 

Maintains Cash Flow

Short-term cash loans are a preferred cash supplement for most small businesses in South Africa. They maintain a constant flow of cash for the business. It also helps in clearing overhead expenses and operational costs. The loans keep the business running in both boom and fall seasons.

The disadvantages of short term loans include:

Small Amounts of Cash

This loan is only disbursed in small amounts. So, if you require a lot of money, this might not work for you. 


Like any other loan type, short term loans attract penalties if you default payment. The rule of thumb for borrowers is to pay their loans as quickly as possible to avoid hefty penalties and additional fees.

Fake Lenders

Remember, 2021 is a hectic year with the country facing economic issues. There are millions of South Africans without employment and others underemployed. Because of these reasons, many people are searching for easy money as a way to survive. So, this has led to the establishment of many fake online lenders that ask for upfront registration fees before lending out money. You should be cautious when looking for creditors and stay away from those who ask for money before lending you some.

The Cycle of Borrowing

Short term cash loans boast flexibility, convenience, and easy accessibility. Their availability can make you fall into a cycle of debts. That means that you will always borrow after repaying as if the loan is part of your income. Sadly, you end up losing a lot of money to the lender in the long run because the loan comes with interest rates and penalties.

Short-term cash loans are ideal loans for most small business owners in South Africa and for people who need emergency cash. They are quick and easy to borrow and are deposited into your account within 24 hours. There are various types of short-term cash loans that you can borrow depending on your need. However, ensure that you can afford to repay the amount borrowed within the stipulated time. If you succeed in paying on time, you could have a good chance of upgrading your credit score and acquiring a higher amount in the next borrowing period.