Beat the Januworry blues with a loan from EasyCredit
Our mates at EasyEquities continue break down barriers in helping over two million clients grow and protect their wealth. The latest offering is a securities-backed lending product called EasyCredit, which allows for securities-based/margin lending against your EasyEquities portfolio.
Basically EasyCredit allows you to access additional cash by borrowing against your portfolio at better rates than unsecured loans.
Using your EasyEquities portfolio as security gives you the benefit of a secured credit lending rate, which is lower than the rate you would get on an unsecured loan such as a credit card, retail credit, personal loan or short-term credit (like payday loans). In EasyCredit’s case the rate is prime +3%, which works out at 14,75%.
Check out the interest rates you are currently paying on your debt; you may be able to save money using EasyCredit rather than unsecured credit!
Keep moving towards your goals
Taking out a loan through EasyCredit means you can avoid disrupting long-term investment goals, breaking the terms on your cash investments or liquidating your shares to meet short-term needs. There are no restrictions on how you can use the funds, which means you can use EasyCredit for whatever you need cash for, like putting down that deposit on a home or to avoid withdrawing from you tax free savings account (TSFA) using up your allowance, and staying invested in the market.
No more hefty portfolios requirements, high costs and unnecessary admin! EasyCredit opens the door to securities-based /margin lending, and the opportunities it can create to a wide variety of investors, from those just starting out to those with six-figure portfolios.
Insights into the South African credit market
South Africa has a large and mature credit market with variety of different debt instruments. However, access to securities-based loans is largely limited to those with sizeable portfolios, restricting the average investor’s ability to leverage portfolios for more affordable credit.
Source: South African Reserve Bank (SARB) Quarterly Bulletin, EasyCredit included for comparative purposes.
The value of households’ outstanding liabilities (mostly credit) at the end of 2022 was approximately R2.7 trillion. Secured credit makes up the bulk of that with mortgages taking up 46%. Unsecured credit, which is generally more expensive, makes up a significant 41%.
According to the National Credit Regulator (NCR) banks hold about 80% of outstanding loans with non-bank providers such as vehicle finance companies and retailers making up the rest. The approval rate of loan applications in South Africa is around 30%.
“Early indications from applications we’ve received show that EasyCredit will add much needed diversity to the credit market,” says EasyCredit product head Mbulelo Mpofana. “We’re also seeing much higher-than-average approval rates right now. We do expect these rates to start trending closer to the industry average over time, but we expect that it will stabilise significantly higher than the market, given the nature of the security pledged by our clients.”
Unlocking investment potential
Equities stand as one of the largest asset classes owned by South African households, offering substantial wealth-building potential over the long term.
Results from the SA Fund Managers Survey, conducted in November by Bank of America, show that more than 70% (compared to 55% 3 months ago) of asset managers believe that SA equities are undervalued, with more than before looking to buy instead of selling SA counters before next year.
“If you also see opportunity and are looking to expand your portfolio, diversify into a new share, max out your TSFA or invest into an offshore portfolio, EasyCredit can give you easy access to funds,” says Mbulelo. “Check how much you qualify for today!”
Mbulelo has called for feedback on the product.
“We would love to hear your views on the EasyCredit concept and the product itself,” he says.