Are payday loans secured?

If you are thinking about borrowing money, it is important that you know the differences between secured and unsecured loans.

Payday loans offer loans from R500 – R3000 or more which allows borrowers to obtain the cash they need when they’re in a quick fix. They are intended more for emergencies when you’re in a jam and in between paychecks.

The nice thing payday loans is that you do not require collateral (something valuable) to “secure” the loan – a guarantee that you will repay the loan. If you do not repay a secured loan, credit providers can take your collateral. Repossessing a car is an example of credit providers taking collateral for unpaid secured loans. Since payday loans are unsecured, lenders depend on your promise to repay your payday loan.

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