Personal Loan - Advice Needed

[RedViking]

Can you expand a bit or is that as much as you're willing to say? Or there no additional light to shed on this expense and possible ways around it / reducing it?

No I don't particular want to discuss it. It is what it is. A loan is my last resort, and I am here now. I completely understand the options before considering a loan, making a payment plan etc. etc. All that has already been discussed. It is beyond anything I can afford. The situation is too complicated to discuss on a public forum.

 

[RedViking]

do you need to pay for services already rendered or future services?

Already rendered and upcoming future services.
They going to rape me until myself and my family have nothing left, the little they have already.

 

[RedViking]

Nothing else of value that could be put up as collateral in order to qualify for a better interest rates? Paid off cars or shares / unit trusts?

Does your RA or other investments offer options to loan money against them? I recall that someone I know had an Old Mutual product that allowed for an interest free loan against the product.

I hate suggesting this, but might be worth considering taking it out of your TFSA (or perhaps you have a preservation fund from an earlier employer)?

I think these are about all the alternatives I can think of as opposed to paying those ridiculous amounts of interest that come with personal loans.

Unfortunately I don't have those as options.

My other option is to find a second source of income and go back to working 20 hours a day.

 

[rodga]

Already rendered and upcoming future services.
They going to rape me until myself and my family have nothing left, the little they have already.

eish man, doesnt sound good!

 

[RedViking]

eish man, doesnt sound good!

No it is not. But yeah, it is what it is.

I will see what I can come up with this week.

 

[RedViking]

Be very careful of the personal loans at the banks. They do reverse compounded interest, add it over 5 years and charge admin fees per month too. I did R100k 3 years ago through Absa out of sheer desperation. Paying back R180k still for "only" 14% inerest...

So it is not possible to settle a personal loan earlier to pay less interest. Or are you fixed to the term and interest calculated, whether you pay more or the set amount doesn't matter?

 

[Barbarian Conan]

Be very careful of the personal loans at the banks. They do reverse compounded interest, add it over 5 years and charge admin fees per month too. I did R100k 3 years ago through Absa out of sheer desperation. Paying back R180k still for "only" 14% inerest...

My dad borrowed around R8k back in the day to buy me the PC I needed for my studies. 3 years later he still owed R8k.
He used to be a bank manager some years before that and he is financially very conservative, so he definitely didn't let payments slip.

Personal loans are sneaky.

 

[supersunbird]

Be very careful of the personal loans at the banks. They do reverse compounded interest, add it over 5 years and charge admin fees per month too. I did R100k 3 years ago through Absa out of sheer desperation. Paying back R180k still for "only" 14% inerest...

Sounds like what all loans do .

Reverse compound interest . It's interest, it compounds, just in the borrowers favor instead of yours.

 

[supersunbird]

So it is not possible to settle a personal loan earlier to pay less interest. Or are you fixed to the term and interest calculated, whether you pay more or the set amount doesn't matter?

The man doesn't know what he is taking about, so don't worry yourself, if you pay in more you will pay less interest overall.

If you loan R100 000, and you say pay back R50 000 3 months later, your interest charged the following month will then be on R49 900 (that R100 would be what you paid back towards the capital in the other 3 months so far, the majority having gone to interest). The term will stay the same, unless you made an arrangement otherwise that your payments debit orders should stay the same.

 

[supersunbird]

Yeah look, I'll freely admit that I'm not a finance guy and don't know much about it or how it works. Don't take anything as I say as law and rather listen to the more knowledgeable people. But I can give some insight into my account, and just had another look to make sure my memory serves me correctly.

I took a R100k personal loan over 72 months in September 2018.

The total (with interest, fees etc.) came to R167100 on 16.75% interest (it's about 3% less now with interest drops over the last years).

I actually wish I could see exactly how much money I paid into it to finally settle it earlier this year, but the account has been closed so I can't pull the statements unfortunately.

I have always been in the fortunate position to be able to pay the 3 personal loans and 3 vehicles loans I have had earlier than the initial term, which is why I know.

A point to note, any loan where the initial loan amount is over R250 000 will have a 3-months notice period (or 3 months interest to settle earlier), which the creditor can waive at their discretion (as my home loan provider did).