The most expensive money there is.
Sometimes it is the right answer. Before it is, it is worth knowing what it costs and what the cheaper door would have been.
- Usual term
- 3 yearsFrom 6 months to 6 years
- Security
- NoneNothing but your income stands behind it
- Assessed on
- AffordabilitySection 81 of the National Credit Act
- When it is done
- Paid outInto your account
Read this part first
Unsecured credit is the most expensive money there is. If the same thing can be bought on secured finance it will almost always cost less — a car on vehicle finance, a machine on asset finance, an extension against the bond you already have. The gap is not small. It is frequently double.
What the Act does and does not protect you from
The National Credit Act caps what a lender may charge: the interest rate, the initiation fee and the monthly service fee all have ceilings. Section 81 also obliges a lender to assess whether you can afford it, and lending into a household that visibly cannot is reckless credit.
What the Act does not do is make an expensive loan a good idea. A capped rate on an unsecured loan is still several times what the same money costs against a house, and the cap is a ceiling rather than a quote — lenders price below it and they price differently from one another.
Consolidation, honestly
Replacing three expensive debts with one cheaper one is real and it works. It stops working the moment the store cards are used again, which is the common ending: the consolidation loan is still there and so are the cards. If you consolidate, close what you consolidated.
What you will need
Straight off the application's own checklist. The ticked ones are required; the rest are asked for only where they apply to you.
- ✓Three months of payslipsSix if your income moves.
- ✓Three months of bank statementsIn the bank's own PDF.
- ✓Your IDBoth sides if it is a card.
- ✓Proof of addressUnder three months old.
- +What it is forOne line. It is not a formality — it changes what you are offered.
Questions
How much can I borrow?
It is set by what you can afford after your existing commitments, not by a headline maximum. A lender is required to work that out from your statements, and an application that shows it clearly is assessed faster.
Will it hurt my credit record?
The enquiry shows, and so does the account once it is open. Paid on time it helps; missed, it does real damage for years. Several applications to several lenders in a short window is the pattern that reads worst.
Can I settle early?
Yes. Under the National Credit Act you may settle a credit agreement early, and for an agreement of this size the settlement is the balance plus interest to date rather than the full remaining interest.
I have been blacklisted. Can I still apply?
There is no blacklist as such — there is a credit record, and what is on it matters. A judgment or a default will narrow the lenders willing to write, and anyone promising finance regardless of it is worth being careful of.