Koodo

Payday loans can be a godsend when you’re running low on cash and find you need a loan in a hurry.

Koodo offers a user-friendly platform that makes getting paid out within 24 hours of approval easier than ever.

Why alternative lenders have become so popular

There are many advantages to using banks for your financial requirements. They offer security because they’re well established and can provide excellent rates and terms.

But, receiving approval from a traditional financial institution can feel like it takes forever because of the mountains of paperwork and strict requirements attached to it.

Koodo, like most non-traditional lenders, specialises in a specific finance product allowing them to put more effort into their service delivery and cut down on non-essential processes.

Offering online loans enables them to make their products available nationwide to anyone with a phone.

Trusted lenders are NCR accredited

The NCR was created to oversee financial service providers in South Africa and hold them to a code of conduct that protects consumers. If a lender has an NCR accreditation, they follow responsible lending protocols and are bound to approve loans only if a consumer can afford the repayments.

This is why Koodo’s loan applications require you to consent to a credit check and ask for your bank statements. Your credit score will show them how responsible you are with your existing debt and allow them to assess the risk involved and adjust the interest they’ll charge you.

Non-payment carries heavy penalties

Even with these safeguards in place, it’s vital that you only borrow what you can afford to pay back in a single payment. Payday loans are deducted directly from your bank account when you receive your salary. Koodo adds a service fee of R50 plus 5% to your account per month of late payment.

After an additional 60 days, if you still haven’t settled your account, it’ll be handed over to a debt collection agency. This causes long-lasting damage to your credit score and will affect the success of future loan applications.

Payday loans are a fantastic way to cover the costs of life’s little emergencies.

You can apply for the cash you need quickly online, and because most of the process is automated, the money can be in your account within minutes.

Borrow up to R5,000

Koodo allows you to borrow between R500 and R5,000, regardless of whether you’re a first-time client or not. However, by responsibly using their service, you can build a positive credit relationship with them and gain access to higher credit limits.

The payment terms offered are between 61 and 65 days; this is double the length of what most lenders offer. While it inevitably increases what you pay in interest, the benefit is that you have more time to save up and pad your account. By doing this, you can ease the impact of the loan repayment on your budget.

A break-down of the fees involved

Finding the right payday loan can be a lot like grocery shopping. You can compare the cost of loans offered by various lenders the same way you would compare brands of coffee.

When comparing the price of finance products, the APR accurately represents the overall cost. The Annual Percentage Rate (APR) combines all fees calculated over 12 months.

Koodo offers a maximum APR of 38%. This includes a service fee of R85 and an initiation fee of 15% of your chosen loan amount. They’ll charge you an interest rate based on your credit score. Once the fees are added together, 15% of the total will be added as VAT.

How the renewal process works

Many people turn to renewal if they find themselves unable to repay a loan on the due date for whatever reason.

While this provides a better alternative to simply not making payments, it’s not without issues. One of the significant considerations before taking this route is the lender's terms and conditions for renewal.

Koodo views it as a new loan and may not approve it unless you have a positive payment history with them. If your application is successful, they’ll apply fees and rates on top of the initial agreement, which will significantly increase the new repayment amount.