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Getting that student loan in South Africa: all you need to know

By July 18, 2018 No Comments

Are you itching to study but worried about the cost? It’s true that university and college tuition is expensive, but it’s possible to get a student loan in South Africa to cover a large portion of the costs.

How does a student loan work?

You and your parent or guardian apply for the loan together. Your parent is required to pay the interest portion of the student loan every month. You are required to pay the remainder of the loan after you have graduated and landed your first job.

Usually the financial institution that granted the loan will give you a few months’ grace after graduating before you need to start paying your loan. If you don’t begin paying the loan back, then your parent will have to cover the loan repayments.

What do you need to apply for a student loan in South Africa?

  • Green, bar-coded ID book (both yours and your parent’s)
  • Your parent’s latest payslip or other proof of income
  • Your parent’s proof of address
  • Proof that you have enrolled at a tertiary institution

You will have to fill in some paperwork (make sure that you know the exact name of the course or degree that you are studying) and hand over all your documents… and then wait for approval.

In order to qualify for student finances, your parent must have a regular and dependable monthly income and a good credit rating. It also helps if your parent has a long term relationship with their bank and has proven their financial trustworthiness. You should also make sure that you are studying towards a degree that will help you find a job and begin repaying your loan quickly. The loan amount that you will be granted is dependent on your parent’s monthly expenses and what repayments they can afford.

How much should you apply for?

You should take into account the cost of tuition, as well as living expenses if you plan to study away from home. A 4-year degree, studying away from home, will cost around R440 000. The same degree, but studied in your home town so that you can live at home, will be about half that cost – R240 000.

Your tertiary institution will be able to give you figures so that you can work out exactly how much your studies will cost in total.

Even though you might be really excited at the thought of moving out, getting some independence and experiencing vibrant campus life in a new city, you should bear in mind that it will take you twice as long to repay your student loan if you study away from home.

Who issues student loans in South Africa?

You can apply for a student loan at all major South African banks, so your best bet is to apply with your parent’s bank where they already have a relationship.

There is also Fundi – a loan provider specifically focused on education – as well as the National Student Financial Aid Scheme (NSFAS) which is a government educational loan provider. You can also speak to the university where you have enrolled, as they can often advise on financial aid for students and sometimes offer bursaries and other discounts.

Is it worth it?

The thought of getting yourself into debt before you’ve even begun your life out there in the big wide world is kind of daunting! But if you’re hard working, have a good plan for your future, and want to make the most of everything that studying after school can give you… then yes, getting a student loan to pay for your studies is totally worth it.

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