Are there other options to SACC loans?
Financial counsellors and consumer advocates are always quick to point out that there are cheaper options compared to a SACC loan, albeit only for a very small minority of the population who meet strict criteria. The financial cost of a loan for most people is not the deciding factor, as most consumers consider the real cost of not accessing credit a key factor – such as not getting their car repaired quickly and not losing their job or lost hours at work. Before entering into any type of loan, it is important that you evaluate your financial situation to determine if a SACC loan is the most appropriate choice for you.
This evaluation should include:
- how quickly you need the money – the consequences for not having timely access to credit;
- how much you wish to borrow;
- what you need to borrow the money for;
- how you will afford the repayments to pay it back in time; and
- if you are using short term loans too often.
If you are having continuing shortfalls in your ability to meet your outgoings, consider seeking financial advice and/or credit counselling.
Other sources of small amount loans can be through a bank credit card which:
- is also high interest;
- can take two or more weeks for approval; and
- does not come with a definite repayment schedule.
This is because a credit card is designed to be used and re-used many times usually without fully paying out the initial loan. This process means that the true cost of using credit cards is not obvious to the user. Using a credit card continually means that you never really pay out the initial amount borrowed whereas if you had taken out a SACC loan then you would have paid the loan out totally. Research has shown that continual usage of a credit card can be a financial trap for some users whereas with a SACC loan once you’ve paid it off, you then have to make a concsious decision to take out another loan only if you really need it.
Another source of small amount loans can sometimes be found through local charities which may provide no interest loan schemes (NILS). These loans may take several weeks for approval and, if you can wait that long and qualify for such a loan, there are also restrictions placed on what and where the loan can be spent, e.g., only on new whitegoods from a certain retail outlet.
NCPA Members will not lend money to applicants they suspect will have difficulty repaying the loan amount.
See below for some useful links to community credit counselling services, charity operated financial assistance services (NILS), and other information about bringing your financial problems under control.
Click here if you feel you need the services of a financial adviser or credit counsellor.
Click here for more information on charity-operated providers of NILS and LILS loans.