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What Is A Loan? – Just Money

What Is A Loan? – Just Money

what is a loan

What Is A Loan?

Ashleigh Brown, journalist at Just Money, recently approached Wikus Olivier, Debt Management Expert at DebtSafe, to discuss the pros and cons of taking out a loan.

This article includes some helpful guidelines if you are thinking of taking out a loan. It looks at how loans work, different type of loans and what you should be careful of when taking out a loan.

How do loans work?

To start off, a loan is when you borrow a sum of money from a credit provider and have to pay that money back over a period of time. Wikus explains that because the credit provider has lent you money, they will typically charge interest and admin fees on top of what you have borrowed.

What different types of loans are there?

All loans or debt can be classified into two main groups, says Wikus. These are “Secured” and “Unsecured”

What should you be careful of when taking out a loan?

Wikus warns that you must make sure that the credit provider from who you are borrowing is in fact registered with the National Credit Regulator (NCR). Only dodgy credit providers do not register with the NCR.