Most Popular Reasons For Personal Loans

Personal loans are an accessible, secure, and reliable way to get a little extra cash.

Whether you need money for a home improvement project, a beach escape, or an unexpected repair, a personal loan can be the right choice for you.

Read on for the most popular reasons to take out a personal loan.

1. Unforeseen Expenses

It happens to everybody. You’re living on a budget, trying to save, paying off debt, and you don’t have a lot of wiggle room. 

So what happens when you come home to a broken refrigerator or your vehicle transmission goes out?

Most South Africans are only saving 0.2% of their income. While this is better than nothing, it’s usually not enough to cover the cost of a large repair or unforeseen expense.

This is where a personal loan comes into effect. Many people use personal loans to finance the surprise expenses that don’t quite fit into the budget. 

2. A Well Deserved Holiday

Not only is travelling a universal hobby, but it’s good for your health. Women who travel regularly are shown to reduce the risk of death from heart disease, and men are 32% less likely to die from cardiovascular disease.

If you haven’t been on a vacation lately, you should consider using a personal loan to fund a relaxing trip. 

Your body and mind will thank you!

3. Consolidate Debt With Personal Loans

Did you know that the debt to income ratio in South Africa is almost 73% on average? That means that 73% of your paycheck is spent paying off debt instead of using it for living expenses.

If you have several active loans or credit cards with high balances, you can use a personal loan to consolidate your loans into one smaller, more manageable payment.

Plus, personal loans usually have a lower interest rate than credit card companies.

4. Student Living Expenses

If you’re in school then you know the challenge of making it to all of your classes on time, completing homework, maintaining a healthy lifestyle with fitness and nutrition, and trying to have a social life.

And unless you qualify for free higher education or have a scholarship, then your options for financing your schooling are limited.

Imagine having to add a full-time job on top of everything else you’re trying to manage. It seems impossible.

Many turn to personal loans to pay for school and living expenses. They see they see the loan as an investment in their future.

5. The Wedding Of Your Dreams

Research suggests that the average South African couple will spend anywhere from R 100 000 to R 180 000 on their wedding, honeymoon, and rings. 

And if you’re like the rest of us, you probably don’t have that amount sitting comfortably in a savings account in your name. 

One of the most common reasons people take out a personal loan is to finance the most memorable and important day of their lives.

If you want the wedding of your dreams, but you don’t have money in the bank, then a personal loan is a quick, easy, and simple way to pay for your nuptials. 

What’s Next?

If you fall in one of the 5 categories above or your wallet just needs a boost, you can use a personal loan to help you today.

Apply for a personal loan with us for the best rate and a repayment plan that’s customized to your needs!

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Ways to stay on top of your Debt

For a lot of people, staying debt-free is nearly impossible. 

At some point in your life, you may need credit to buy something, like a house or a car. Debt isn’t necessarily a bad thing when used to your advantage. After all, paying off debts on time is the best way to improve or maintain your credit record.

The problem arises when you spend all of your income repaying loans while you’re unable to afford the most basic necessities, like food and transport.

Of course, if you do get into too much debt, there are solutions like debt consolidation loans and debt counselling that can help you get your finances back on track. However, it’s better to stay out of trouble altogether than to rely on a loan to fix things. Try these five ways to stay on top of your debt.

Budget Basics

Having a budget is the number one way to avoid becoming over-indebted. If you don’t have one, you’ll be amazed to find out what you’re spending your income on.

Falling into a debt trap can happen because people assume they know what’s going on with their finances. The R20 here for chewing gum and the R50 there for lunch seem like minor expenses at the time, but add them all together and suddenly you’re spending twice as much on food as you thought you were.

Cash Over Credit

If you find something you really want but don’t absolutely need, pay for it with cash, not credit. This requires being honest and tough with yourself. If you can’t afford it straight up, it’s better not to buy it all. That doesn’t mean you have to do without anything that isn’t a necessity, though. Look at your budget, work out a plan, and save up for it. The wait and effort will be worth it.

Trim the Term

It can be tempting to take credit over a longer term to make monthly repayments smaller. This is especially common when buying a car, because you can often get a higher spec vehicle than what your budget allows for if you take a finance deal over a longer term. It makes sense in the short term – you get what you want at an amount you can afford. However, it’s better to stick to your original budget and pay off things as quickly as possible. The longer the term, the more you end up paying because the interest is greater.

Save Those Cents

Even if only just a little, save, save, save. The basic rule is to save 20% of your income every month. In reality, how much you can save probably differs each month. If you have an unexpected expense, you’ll have less money for savings. No matter what happens though, try to save something every month – even if it’s just R 300.

Read Your Report

In South Africa, every person is entitled to one free credit report on themselves every year. Use this to find out if there is any incorrect information against your name affecting your credit score, and get an objective view on how you’re faring with your credit rating.

If you find you’re unable to deal with all of your debts, it’s important to accept help. This can be in the form of a loved one assisting you with a budget, using a professional debt counselor, or taking out a debt consolidation loan to help manage your creditors.

Prices quoted are correct at the time of publishing this article. The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.

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Tips to Save Electricity

Conserving electricity serves the double purpose of helping stop global warming and saving a lot of money over time. Take a look around your home and office: any appliance that operates on electricity can be made more energy efficient. Insulating your home and changing your daily habits are also effective ways to reduce the amount of electricity you use. Read on for more details on how to save electricity.

1

Embrace natural light. Open up your curtains and let the sun shine in! Using natural light whenever possible instead of relying on artificial light can greatly reduce the amount of electricity you use during the day.[1] The same is true whether you work in an office or spend your days in your house. Exposure to natural light also increases happiness,[2], giving you an even greater incentive to raise the blinds.

  • Try to arrange your workspace so that natural light floods your desk. Keep the overhead lights off when possible. When you need extra lighting, use a low-powered desk lamp instead.
  • Buy curtains or blinds in a light shade. They will still allow light to come through, but also provide privacy when you need it.

2

Change your bulbs. Replacing regular incandescent light bulbs with compact fluorescent (CFL) or LED bulbs is a big energy saver. Incandescent bulbs release 98% of their consumed energy through heat, while CFL and LED bulbs are much more energy efficient and last several times longer.[3]

  • CFL bulbs were the first alternative to incandescent bulbs, and they use only about 1/4 the energy of incandescent bulbs. They contain trace amounts of mercury, so they must be disposed of properly when they burn out.
  • LED bulbs are newer to the market. They’re more expensive than CFLs, but they last longer and don’t contain mercury.

3

Turn off the lights. This is the simplest, most common way to save electricity, and it really works. Start paying attention to how many lights are on in your house at a given time. Be mindful of how many lights you really need to be using at once. When you leave a room, make a habit of turning off the lights, every single time.
  • Use light bulbs which don’t need to “warm up” for areas that have lights which are used for short periods of time. This information should be written on the bulb’s packaging.
  • If you really want to go all out, have your family use just one or two rooms at night, rather than spreading out all over the house and keeping your entire home lit.
  • For maximum electricity savings, use candles! This old-fashioned system of providing light at night is effective, romantic and peaceful. If you don’t find it practical to use candles every night, try doing it just once or twice a week. Be careful doing this with little kids, though – make sure all of your family members know how to handle candles safely.

4

Unplug any appliances that aren’t in use. Did you know that appliances that are plugged in keep using energy, even when they’re switched off? Even an appliance as small as a coffee pot continues slowly sapping energy every moment it stays plugged in, long after the last cup of coffee has been consumed.
  • A power strip with a switch makes this easier. Instead of pulling 5 devices out of their sockets, all you have to do is flip a switch.
  • Power down your computer and unplug it at the end of the day. Computers use a lot of energy, and when they stay plugged in you’re wasting both energy and money.[4]
  • Don’t leave your TV plugged in all the time. It may seem inconvenient to unplug it when you’re finished watching, but the savings are worth the trouble.
  • Unplug your sound system and speakers. These are some of the worst culprits when it comes to sapping extra energy when they aren’t in use.
  • Don’t forget small appliances such as phone chargers, kitchen appliances, hair dryers, and anything else you’ve got that runs on electricity.

5

Replace old appliances with energy-saving models. When older appliances were manufactured, companies weren’t as concerned with saving electricity. Newer models are designed to conserve energy, reducing your household costs and lowering your carbon footprint. If you have an older refrigerator, electric stove and oven, dishwasher, washer and dryer, or other large appliance, look into getting it replaced.
  • Look for “Energy Star” ratings on new appliances. These help you assess how much energy the appliance uses. Many energy-conserving appliances are more expensive than those that don’t have this feature, but you’ll earn the money back over time through electricity savings.
  • If replacing your appliances isn’t an option, there are still plenty of ways to change your routine so that you’re using as little electricity as possible.
    • Fill the dishwasher up before running it, rather than running a smaller load.
    • Don’t open the oven while it’s in use, since you release heat and the oven has to use extra energy to produce more.
    • Don’t stand at the refrigerator with the door open trying to decide what to eat. Open and close it as quickly as possible. You should also check the seals on your refrigerator and replace them when they get worn out.
    • Do full loads of laundry instead of small loads.
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What Is a Good Credit Score and How Can You Improve?

What Is A Good Credit Score?

So, what do financial bureaus consider a good score? In general, you’ll appear more trustworthy and credible as your score increases. Here’s a breakdown of the score ranges and what they mean to financial institutions:

650+: Minimum risk for lenders, near perfect score
620-649: Low risk, an excellent score
600-619: Average risk, a good score
581-599: Average risk, an average score
490-581: High risk, a low score
Below 490: Maximum risk, bad score
In South Africa, the average credit score hovers around 500 and 600.

Credit Score Ranges

If you need credit or a loan, then you’ll find out fast how important your credit score is. In South Africa, a good credit score is a valuable asset. So, what is the range of credit scores?

Credit scores in South Africa usually range from 330 to 999. Your score should fall somewhere in this range. Younger adults may find themselves without any credit at all.

Factors That Impact Your Credit Score

What types of things will increase or decrease your score? Here are a few factors you need to know about:

  • Your payment history
  • The total amount you owe to lenders
  • The length of your credit history
  • The types of credit you currently have
  • New credit you’ve applied for

South Africans have a right to one free credit report each year from each bureau. That includes TransUnion credit bureau, Experian, XDS, and Compuscan.

It’s best to check your credit history every year. You need to verify all the information is accurate.

How To Raise A Low Score

There’s a big difference between having no credit and bad credit. It’s easier to build credit with no payment history than to repair mistakes and bad credit. How can you raise a low score? Here are a few tips:

  • Always pay your bills on time. When you can’t, contact the lender and negotiate a lower payment or later due date.
  • Fix your debt ratio by only using 40-60% of your credit lines.
  • Don’t open new accounts until you’ve raised your score.

It takes time and effort to raise a low score. Don’t expect results overnight. Credit scores reflect consistency, so you’ll have to show that as you make payments to lenders.

So, what is a good credit score? In South Africa, you’ll want to at least reach an average score between 500 and 600. This will give you the ability to get loans when you need them.

Are you ready to take control of your finances? Learn how a EC Online Loans works, and reach out to a us when you’re ready to move forward.

Avoid These 5 Money-Wasters to Repay Your Student Loans Faster

Avoid These 5 Money-Wasters to Repay Your Loans Faster

Making extra — or extra large — monthly payments is key to repaying your student loans ahead of schedule. But coming up with that extra cash is a challenge. Thankfully, you can carve out more room in your budget by learning how to avoid wasting money.

Budgeting is a powerful financial tool, yet it begs the question: How much help would it really be in paying off your loan?

How to avoid wasting money and repay student loans: our sample scenario

As a thought experiment, we ran the numbers on some potential savings in five different categories to see what that extra money would mean for a typical R 30,000 student-loan debt tagged at 7.00% interest.

Note that the sample savings below are only anecdotal, based on examples  — they might give you a rough idea, but your own savings could be greater or smaller, depending on the situation.

1. Prepared meals

You might think there’s not enough time in the day to work your day job, worry about your loans and still prepare a brown bag for lunch and a hot meal for dinner.

But every trip to (or order from) the deli, cafe or restaurant starts adding up. Delivery costs nearly five times the price of cooking at home, and even meal-kit companies are about three times more expensive than doing your own grocery shopping and preparation, according to the home-cooking website Wellio.

Instead of eating into your budget, you might try meal planning weekend to fill your fridge for the rest of the week.

  • Sample savings: R 2,900 per year by cooking on a budget
  • Loan payoff: Adding R 2,900 — or R 242 per month — in extra payments could save you R 6,125 in interest

2. Transportation

Whether your guilty pleasure is pressing “request pickup” for Uber  ride-shares — or jumping in your car when you could take your bicycle instead — a lot of money can be saved on your commute to and from work. Carpooling and becoming a one-auto family, for example, could save you about R 8,849 — the cost to operate and own a vehicle, according to AAA.

Even if you work remotely, consider your methods of transportation and how much you could save using cheaper alternatives, such as the bus or train.

Or, if you’re not ready to make a major change to your daily routine, consider that you could save three figures the next time you take a one-off trip for fun. By using strategies, such as booking your flight at the right time and not checking bags, you could save north of $600.

  • Sample savings: R 619 on your next vacation
  • Loan payoff: Making a lump-sum payment of R 619 could shave three months off your loan term

3. Shopping

With so much money going to your lender every month, you might be tempted to treat yourself occasionally. Whether you prefer online shopping or heading to the mall, however, there are ways to cut down on wasteful spending.

You might try putting every purchase through our five-question “stress test,” for example. Or you could take a break altogether from consumerism and try a shopping ban:

  • Sample savings: R 600 per month with a shopping ban
  • Loan payoff: Submitting R 600 in extra payments per month — or
  • R 7,200 for the year — could take seven years off your loan term and save you R 8,554 in interest

4. Subscriptions

Be watchful for wasteful spending that is more passive in nature. Think about all the recurring charges that appear on your credit card statement, for example.

Maybe you have a gym membership you’re not using or a cable subscription you could replace with a cheaper alternative. Whatever the case, taking a line-by-line approach to your budget could save more than you might think. Start with the entertainment category, for example, where cord-cutting could save you a Benjamin each month:

  • Sample savings: About R 500 per month by canceling cable
  • Loan payoff: Throwing another R 1100 per month — or R 12,236 for the year — could get you out debt almost three years faster and without forking over R 3,738 of interest

Learn how to avoid wasting money by calculating your repayment savings

Even if you’re skeptical about how much waste you could find in your budget, you might be intrigued by how the potential savings can be parlayed into a shorter student loan repayment.

Of course, the figures above don’t apply to your specific situation. To see how much you could benefit from identifying and cutting waste, input your loan amount and interest rate into these easy-to-use calculators:

  • Student loan prepayment: Set a new finish line after accounting for set extra payments each month.
  • Lump-sum extra payment: Figure the effect of a one-time (but extra-big) payment.
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