Secured Loans in South Africa

If your credit record has a few marks against it, or you simply want the lowest possible interest rate, a secured loan is worth a closer look. By putting up an asset as collateral, you give Loan Wave less risk to price into your rate, which can make a secured loan noticeably cheaper than its unsecured equivalent over the same term.

It also opens the door to borrowers who might otherwise struggle to qualify for credit based on affordability alone.

What Is a Secured Loan?

A secured loan is finance backed by an asset, such as a vehicle or other valuable property, that the lender can claim if the loan isn’t repaid. This lowers the lender’s risk and, in turn, usually lowers your interest rate. For a full side-by-side breakdown, read our comparison of secured and unsecured loans in South Africa, which covers how each option is assessed and priced.

How Collateral Works

The asset you offer as security needs to hold enough value to cover the loan amount. A common example is a vehicle, which is why Loan Wave is also able to offer finance for cars older than 10 years on a secured basis, when many traditional lenders won’t touch them. Larger goals, like a major home renovation, can also be financed this way if you have a suitable asset to offer as security.

Benefits and Risks of Secured Loans

The upside is clear: lower interest rates and, often, a higher borrowing limit. The trade-off is equally clear: if you default, Loan Wave has the legal right to repossess the asset you’ve put up. Because of this, we only approve secured lending once we’re confident, through the affordability assessment required under the National Credit Act, that you can manage the repayments comfortably.

Who Should Consider a Secured Loan

Secured loans tend to suit applicants with a lower credit score who’ve been declined for unsecured credit, or anyone who owns a valuable asset and wants to borrow at the best possible rate. As a lender registered with the National Credit Regulator, Loan Wave assesses every application individually rather than relying on a blanket credit-score cutoff.

Applying for a Secured Loan with Loan Wave

The process starts the same way as any other Loan Wave product: an online application covering your income, expenses, and the asset you’d like to offer as security. Our guide for first-time loan applicants lists the documents you’ll need. Business owners looking to leverage an asset for working capital can also apply this route through our business loans page.

Once your asset and affordability have been verified, funds are typically paid out within a day or two of accepting your offer.

If you would like a loan to revamp your kitchen, apply with Loan Wave today. We would love to help you create a kitchen you love!

Loan Wave is a registered credit provider operating under the National Credit Act. Please ensure you can afford the repayments before applying.