Things to look for when selecting a reputable lender

By Nhlanhla Thabede
9/14/2020 | 9 min read

Many people have been and continue to be targeted by scams that attempt to con them out of their hard-earned money. Unfortunately, technology is making things even easier for scammers; they are continuously finding new ways to target their victims. What these scammers do is to promise their victims large sums of money in the form of a loan and require that they pay a small “fee” up front. To carry out their con, scammers typically impersonate a well-known loan provider and claim to be offering a large, low-interest loan.

Companies have warned of an increase in fraudulent activity; “We have seen an increase in incidents of fraud, specifically advance-fee scams,” says Wonga SA’s head of marketing, James Williams. “What is most concerning is how ‘slick’ these scams have become, with fraudsters posing as Wonga in calls, emails, text messages, and even social media posts that bear an uncanny resemblance to our communications,” he adds.

In this article, we’ll discuss a list of reputable lenders, whom you can turn to when you need any form of a loan. We’ve also put together a guide to help you identify how scams are carried out and how you can spot them.

Finding a reputable lender

The list of banks that are trending in low-interest personal loans

African Bank

African Bank is a locally controlled bank and it is currently under the curatorship of the South African Reserve Bank. This bank has different options namely, personal loan, 15% loan, consolidation loan, and value-added deals. Personal loans at African Bank that qualify have an option to choose a break from payment for a month.


FNB is a locally controlled bank with a massive reputation for innovative banking. If your FNB personal loan is up to date you will automatically qualify for a January free of a loan instalment every year. What’s attractive about FNB personal loan offers, is that there are no penalty fees involved when you settle your debt early.


Nedbank is a South African owned Bank with a good track record in offering low-interest rates in personal loans. If you’re looking to get a Nedbank personal loan, you only need to follow these requirements:

  • Be permanently employed or employed under a contract or be self-employed.
  • Earn a net salary of at least R3 500 a month, with a minimum basic salary of R3 500 a month deposited electronically into your bank account.
  • Have a valid barcoded South African identity document or smart card ID.
  • Have the most recent payslip(s) for one month or your letter of employment if you are a contract worker.
  • Have stamped bank statements for the last 3 months (reflecting your salary).
  • Have a proof of residence, such as a utility bill or any statement of account.


Capitec is a bank that is bringing much change to how banking is done in South Africa. With its disruptive style of banking, Capitec is challenging the status quo of the personal banking industry of South Africa. A Capitec personal loan has – included in the offer – a free retrenchment and death cover. This means that at no extra cost you receive a credit protection plan (there are some minor conditions that determine the amount that pays out in such situations).


As of 2013, Absa is British owned and part of the Barclays Group. A personal loan from Absa will have an offer available for a Credit Protection Plan. The bank also makes opportunities available for loan holders to make extra payments during the loan to pay off the debt faster. This allows less interest to accumulate on debt.

What are the best banks for home loans in South Africa?

The latest South African Consumer Satisfaction Index (SAcsi) results show that Capitec customers are the most satisfied. It also shows that the bank’s clients, along with those of FNB, are the most loyal in the country.

The SAcsi 2016 satisfaction scores for South African banks were:

  • Capitec – 83.1 percent.
  • FNB – 81.3 percent.
  • Nedbank – 77.0 percent.
  • Absa – 74.2 percent.
  • Standard Bank – 71.9 percent.

Things to look for

There are several ways to check if a loan company is legitimate. The first thing to do is to check if the supposed lender is on your local Better Business Bureau website. Once you have done that, do a quick online search and look up customer reviews. And finally, check with your adviser on the legitimacy of the lender and if it is properly registered.

Before you apply go ahead and apply with a lender, consider the below steps to make sure you don’t get caught up in a scam.

1. Check for online presence

Before you accept the offer, do an internet search for the company name. Even if it’s relatively new, it should have a profile on websites and possibly even reviews from existing customers. If the lender has no online presence, they are probably not legitimate. If you can’t find anything, you’ll likely be better off missing out on the offer.

2. Read customer reviews

Even if the loan company has an online presence, that doesn’t necessarily mean that its operations aren’t seeking to exploit people. There is a saying that experience is the best teacher and it doesn’t have to be your own experience, you can learn from someone else’s. Check what people are saying about the loan you’re about to take. If you find that the lender wouldn’t be a good fit, search for a better one.

3. Check your comfort level

Lenders want your business, but they’re not desperate for it. If you feel like your contact with the company is overly aggressive or manipulative, it might be a sign that they’re trying to fluster you and make you feel like you need to decide before you get all the facts.

If you feel uncomfortable about the process at any time, take a step back and consider why you feel that way and whether you should continue.

4. Check for contact information

A lender’s phone number, email address, and physical address should be readily available on the website, even if it’s an online-only lender.

5. Investigate online reviews

In some cases, the reviews may be mainly from people who work for the company. Do a thorough investigation, ask your Twitter and Facebook community if they have heard of your loan shark. Also, check google reviews, customers posting on Google will have the best insight into the experience of working with a lender.

Tips on how to apply for credit the right way

  • Check your credit report and credit score (you can get a free credit report with African Bank even if you are not a customer). If you want to manage credit well and avoid problems, it’s important to know how your spending and repayment behaviour affects your credit score report.
  • Find out what type of loan and for which amount you qualify for at a reputable financial service provider.
  • Carefully consider why you want the loan. Having a good credit record should not be a gateway to frivolous lending. A loan is a big financial commitment.
  • Always look for a loan that is priced within the regulations set by the National Credit Regulator (NCR) and ensure that the Total Cost of Credit (which includes interest, fees, and possibly credit life insurance) is disclosed.
  • Avoid overusing credit. Even if lenders extend you credit, you don’t have to take the full amount. Take up the amount required to satisfy the need or problem that you are trying to solve.
  • Action any damage to your credit record. Your credit report could indicate that you are behind in payments when, when in fact, you know you are not, or a criminal could steal your information and accumulate bad debt in your name. Take immediate steps to fix anything which harms your credit standing.

Ways to identify scammers

Scammers often have a formula that they follow and to help you identify this, Wonga has laid out the steps that con-artists typically follow:

1. Contact

Scammers pose as a known lender to contact victims through text messages, email, and fake Facebook or Twitter accounts. They send victims friend requests or comment on Facebook or Twitter posts advertising the fact that they are loan consultants. The scammers usually claim to offer low-interest rates, well below the prime lending rate. They also claim to provide loans to blacklisted people without the need for credit checks.

2. Gathering personal information

After contact has been established, scammers ask their victims to provide personal information such as their name and surname, identity number, salary and employment details, financial status, and bank account details.

3. “Approval.”

Once this information has been provided, the victim’s loan will be “approved”. Loans are always approved, regardless of the amount, loan term, or applicant’s credit status. This process is usually done rapidly, as the scammers try to capitalise on the victim’s ignorance before they become suspicious.

4. Requesting payment

After being informed that their loan has been approved, the victim is told that for the funds to be paid out, they are required to pay a fee upfront. Scammers often claim that this is an upfront administration cost required for the legal team to release the payment. Scammers will usually request that payment is made quickly.

5. Requesting further payments

Often, as soon as the initial payment has been made, the scammers will try to extract more money from the victim. This is done by requesting further payments for additional legal or administrative costs. The scammers will exhaust this process until the victim becomes suspicious or can’t afford to make any further payments.

Bottom Line

Make sure that you take the time to research your potential lender. The worst thing that can happen is to end up paying for money that you did not use. If no one is talking about the lender that you are approaching, chances are, they don’t exist. Use the above information to analyse the potential lender and learn if they are reputable or not. That way, you’ll be making a decision based on knowledge rather than from a point of desperation.


By Nhlanhla ThabedeTags:
  • Debt Consolidation
  • Debt Management
  • finance
  • finances
  • Financial education
  • getup hacks
  • GetUp Life hacks
  • loans
  • personal budget
  • Personal Finances


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