We all know how important education is in our lives. It is the key to reaching our dreams and surviving the harsh world we’re living in.
However, the reality is that it’s not easy to finish school, especially with the expensive tuition fees and other costs accompanying it. Some just drop off since they’re unable to get a college degree because of financial concerns.
There’s a way around this. There are many lenders that can provide financial assistance for students in South Africa. By applying for a student loan, you can go to college and repay the debt back after you finish school.
Read on to know how to apply for student loans in South Africa.
What is a Student Loan?
A student loan is borrowed money that you can use to pay for your tertiary education. The borrowed amount can be used to pay for tuition fees, board and lodging, school supplies, and living expenses while you’re in school.
Student loans in SA have lower interest rates compared to other forms of loans. The rates are also fixed which means it won’t fluctuate in sync with the market’s prime rate.
Student loans are considered a ‘good’ form of debt. This is because you’re borrowing money to invest in something that will be worth more in the future than the loan you’re applying for.
How do Student Loans Work?
Student loans in South Africa have fixed interest rates and are relatively lower compared with other loan types. Financial assistance for students in SA goes through a faster approval process compared with other loan requests. The goal is to send as many students as possible into college without burdening the debtors.
Another advantage of loans for students is that you don’t have to repay the debt months after your application has been approved. Lenders will usually let you finish college before you’re required to start repaying the loan. Some may even allow you to pay for the interest while you’re still in college to prevent your debt from piling up.
If you remain unemployed for quite some time after graduation, your lender may grant you an extended grace period before resuming repayments.
Debtors who fail to complete their studies have no choice but to repay the full loan immediately.
Applying for a Student Loan
Here’s what you need to prepare in applying for a student loan in South Africa:
- Your bar-coded ID book
- Your parent’s ID book
- Your parent’s payslip
- Proof of address
- Proof of enrollment showing you are qualified to enter a tertiary institution
Present these documents to your lender and complete the forms they’ll be requiring you to answer.
Make sure that the institution you’re entering is qualified and recognized by your lender. Not all schools accept payment through student loans.
Lenders will look into how much your parents earn each month. Some will approve only those who have parents earning at least R5 000 or more each month. The loanable amount lenders will approve depends on your parent’s income and their credit history.
You should already have a number in mind of how much you want to borrow for your student loan. When you’re asked to give a number on how much your monthly expenses are, provide them with a low number. It doesn’t have to be too realistic. The computation lenders use won’t be able to determine whether it’s possible or not for your family to survive with the monthly expenses you gave them. This tip may make your chances of getting approved higher.
Top Bank for Student Loans in South Africa
The biggest banks in South Africa offer affordable loans for students. Contact the following banks to know more about their student loan offer: