The different types of credit

Content provided by a guest contributor.

As a small business owner, it is important to know all about credit. You need to know how to apply for loans and how to manage them. Almost everyone will find themselves in a position of needing a little extra help at some point in their lives.

There are various types of credit that you should be aware of in order to be able to weigh up what is best for you your particular situation.

The first thing to know is the difference between secured credit and unsecured credit.

secured credit

Secured credit is secured against an asset, sometimes known as collateral.

Car and home loans are a common form of secured credit. In this case, you are loaned the necessary amount to buy a home or car with the agreement that you will pay it back over a set period of time. Because it is secured credit, failing to meet payments means the lender could repossess or take away your home or car.

unsecured credit

Unsecured credit is the opposite – it is not tied to any asset. Getting unsecured credit depends on your creditworthiness and ability to repay. A common example is credit cards: you can borrow and spend up to a specific amount, which you then have to pay back.

Whichever type of loan you take out, it is important to know beforehand how you’re going to manage your account. Managing your account starts even before you apply. It’s important to know what kinds of credit are available, so that you can manage your finances accordingly and make the right borrowing decision.

The content in this article was provided by DirectAxis.

About DirectAxis:

DirectAxis is a proudly South African business that has been in operation for 23 years.  Initially a direct to consumer insurance brokerage, DirectAxis moved into personal lending shortly after opening its doors. Targeting the low risk mass middle market, DirectAxis offers a range of products from personal lending to life and short term insurance and more recently access to financial health through its Pulse platform.

DirectAxis is the largest and most successful direct marketing financial services provider not only in South Africa but on the continent. We promote responsible borrowing and lending and are compliant with the National Credit Act. We continue to develop the digitisation of the business to deliver a positive and meaningful experience to our customers across all touchpoints.

We sponsor initiatives that we believe enrich the greater community. DirectAxis is a proud partner of the Currie Cup, a tournament that is steeped in history and tradition and is regarded as the cornerstone of South Africa’s rugby heritage, the most prestigious domestic rugby prize and stepping stone for future Springboks. It’s where dreams are born. We’re delighted to also sponsor the False Bay Rugby Club, winners of the 2017 Gold Cup tournament, and we launched the DirectAxis Walk for hunger in March 2018.

Driven by a common purpose, to give everyone we touch the power to build a better life, DirectAxis, as part of the FirstRand Group, is perfectly positioned to continue its journey as one of the most successful businesses in the country.

For more information, contact:


Tel: 0861 02 03 04

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