How to Take a Microloan Without Paid Services

Loans are one of the most common financial instruments that allow people to cover expenses they cannot immediately pay from their own funds. They help bridge short-term financial gaps, handle unexpected costs, or finance urgent needs such as repairs, medical bills, or household purchases. Different types of loans exist for different purposes — from small microloans to larger consumer or mortgage loans — giving borrowers flexibility in managing their finances.

Microloans, in particular, are designed for short-term lending of relatively small amounts. They are often used to cover immediate needs when time is critical and traditional bank loans are not suitable. This makes them a convenient tool for those who need cash quickly, but it also means borrowers should carefully check the terms of the loan to avoid unnecessary fees or hidden costs.

Have you taken a 5,000 Rand microloan, only to find yourself owing 8,000 Rand? Often, this is not due to interest, but due to additional paid services unexpectedly included in the contract. Here’s how to prevent unnecessary expenses and take a microloan safely.

Which Paid Services Can Microfinance Companies Include?

Microfinance organizations may include the following paid services in your loan:

• Insurance;
• Credit history analysis;
• Bank card verification;
• Medical services (e.g., telemedicine);
• Legal consultation;
• Sharing loan data with multiple credit bureaus;
• Fee for transferring the loan to a bank card.

These extra services can significantly increase the total debt, sometimes by hundreds or even thousands of Rand, making the loan much more expensive than expected.

How to Take a Microloan Without Paid Services

When applying for a microloan, always read the contract carefully. Pay special attention to the Total Cost of Credit, usually found in a box at the top right of the first page. The TCC shows the total repayment amount, including interest and additional services. The list of additional services included with the loan is usually listed on one of the first pages of the contract.

Some microfinance organizations may try to hide these paid services by placing them in less visible sections of their websites or by combining document approval into a single SMS confirmation.

How to Refuse Paid Services from a Microfinance Organization

The microfinance company must provide a notification on the day of loan issuance or the next day detailing the purchased services and explaining whether they affect the interest rate. If you don’t receive this notification, you should request it directly from the organization.

Legally, you can refuse paid services within the first few days after signing the service agreement. To do so, submit a written request to the company providing the service, often possible via their website or app.

If the service agreement is collective rather than individual, the refusal request should be sent directly to the microfinance organization. Refunds are made in full if the service was not provided, and partially if the service has been partially delivered.

Sometimes users accidentally subscribe to paid loan matching services they don’t need. In such cases, the subscription should be canceled directly through the service provider.