How Payday Loans Can Hurt Your Chances of Getting a Home Bond

Summary

Many South Africans who run out of cash often turn to payday loans as a quick fix. These short-term loans might seem helpful initially, but they can cause serious problems when you apply for a home bond later. Payday loans usually have very high interest rates and fees, making it hard to pay them back on time. Missing payments or having multiple payday loans on your credit record lowers your credit score, which lenders check carefully before approving home loans. If your credit score is low, banks might reject your bond application or offer you a loan with higher interest rates. To avoid this trap, it is important to budget carefully, avoid unnecessary short-term loans, and explore other financial options like borrowing from family or negotiating payment plans with creditors. Maintaining a good credit record and managing debt responsibly will improve your chances of getting a home loan in the future.