How To Get a Private Loan

get a private loan south africa

Private loans, not to be confused with personal loans, can refer to small or short-term loans (such as a payday loan) or to a loan that does not go through a financial institution. This can be a loan from your company, peer-to-peer loans or even a loan from a friend or family member.

In the United States, private loans refer to non-federal student loans; however, this does not apply to South Africa where the term private loan is not used in this sense. There are a number of benefits to a private loan. There is no need for a credit check in some cases or potentially even a lower interest rate.

We take a look at some of the options available to you when securing a private loan.


These NCA (National Credit Act) defines microloans as any loan under R8000 and payable over not more than six months. The interest rates on these short-term loans tend to be set to the maximum, as lenders sometimes take a big risk loaning money to those without good credit. These microloans include payday loans and short-term cash loans.

Peer-to-peer loans

Peer-to-peer (P2P) lending is generally done through an online service, which acts as an intermediary between borrowers and lenders. These services cite lower overheads as the reason that these types of loans are more affordable. The P2P service itself does not offer loans. Instead, the lender dictates the terms of the loan. Lenders often view these loans as a type of investment and are therefore interested in quick and good returns.

Company loans

Some companies will allow their employees to take out loans with them, provided there is a contract, which will dictate repayment terms and interest rate. The instalments would generally be taken directly from your salary every month. Repayment periods on these loans tend to be short and the company can choose whether or not to grant the loan based on a number of factors such as duration of employment or if you already have outstanding debt with the company.

Loans from friends and family

If you have a close friend or family member who can afford it, this is probably one of the simplest ways to get the extra cash you need. However, one of the many pitfalls of a loan from someone you know is the unofficial nature of the loan. This can lead to family squabbles if you’re not careful to dictate the terms before making the loan. Be sure to draw up a contract that is binding to both the lender and the borrower.

Asset-based loans

These are loans based on a valuable asset, which is fully paid off and in your name. This can be anything from a car to a luxury watch. The asset stands as surety for the loan making it a secured loan with a better interest rate than many other private loans. Your asset is taken into secure custody by the lender until the loan is repaid, after which it is returned to you so there is little risk to either the party.

Asset-based loans are also useful if you don’t want to loan to affect your credit score or if your credit is not good at the time. The risk to the lender is minimal because there is a valuable asset on which the loan is based.

At lamna, we offer same-day cash loans against the value of a wide range of personal assets, from luxury watches and jewellery to vehicles or artwork. Our interest rates are competitive, and we’re fully compliant with the National Credit Act.

For more information about using an asset to secure a short-term loan, contact us on 086 111 2866 or simply complete and submit our online application form.