A good education is an investment in your future, but it hardly comes cheap. Unless you are the recipient of a bursary or are benefitting from parents who diligently saved, you may be considering a student loan. Moneybags journalist, Danielle Van Wyk looks at what you should note when applying for a student loan this year.
There are increasingly institutions that offer student loans every year, but the most common are typically the big four banks (big 4). Moneybags investigates the offerings of the big 4, and how you can apply.
Standard bank: A helping hand in financing both your tuition and your accommodation, Standard Bank directly pays the institution and place of residence whilst funds for books will be transferred to the transactional account.
“Student Loans are granted for a specific year of study and you will have to reapply for each year of registration. There is a maximum amount granted for each year of study. The course and institution that you choose for your studies must be accredited by at least one of the following bodies:
- SAQA;
- SETA;
- Umalusi; or
- Department of Higher Education (DHE)
A once off initiation fee and monthly service fee will be charged on your student loan,” states Standard Bank.
Repaying your loan: If you are a full-time student, you will only need to start repaying your loan on completion of your studies. During your time of study, your surety will need to pay the monthly interest and service fees. The payments will be charged to your surety's bank account.
“You will be granted a grace period for capital repayments after you have completed your studies and have not found employment. The grace period may be extended if you must complete your articles, internship or community service.
“If you are a part-time student, you will need to repay your loan while you are studying. Monthly payments must be made by debit order. You will be required to repay your loan immediately, if you do not complete your studies,” adds Standard Bank.
Applications: To apply for a student loan you need to be registered at an accredited tertiary institution and be studying towards:
- a certificate;
- a diploma;
- a degree; or
- a postgraduate degree or diploma
Income Criteria
- Degree and Diploma: Your surety should earn a minimum income of R3 000 per month.
- Other Courses: Your surety should earn a minimum of R5000 per month.
- Part Time students who earn R5000 or more do not require a surety.
If you are 18 years or older, you can apply online at youth-applications.standardbank.co.za/mystudentloan
If you are under the age of 18 years, you and your guardian - can apply at your nearest bank branch.
First National Bank (FNB): An FNB student loans gets you funding to cover a range of study-related expenses, including:
- Tuition fees
- Books and devices
- Equipment
- Accommodation
Repaying your loan: “Students gain access to a personalised interest rate for loans from R4 000 to R80 000* and they only pay interest while the student completes their studies and start repaying interest + capital after completion of the qualification,” adds FNB.
To apply students, need:
- To be over the age of 18 years
- Principal debtor must earn at least R6000 +
- The student must be registered with a South African Tertiary Institution.
“Student Loans are applied for on an annual basis and a new loan application is required for each academic year of study. The application is subject to a credit and affordability assessment, which will determine how much you qualify for. It is strongly recommended that you only borrow the amount of money required per academic year and keep financial obligations low to avoid the risk of not being able to secure finance for the entire duration of studies,” adds FNB.
Applications: To apply and find out which documents the process requires visit the FNB site. Alternatively you are welcome to visit your local branch or contact them.
Absa Bank: “Finance your full tertiary experience from either fees, accommodation, books or even technical devices you need for your studies,” states ABSA.
- Both undergraduate and postgraduate qualifications are financed with the duration of the course being more than two months.
- You can apply for a minimum amount of R15 000.
- The study loan will only cover one year’s tuition fees and associated costs. You will need to re-apply the following year if you proceed with your studies.
- A study loan is awarded based on each customer’s risk and credit ratings.
Repaying your loan: “You can opt to make capital and interest repayments as soon as your application for a study loan is approved. You can repay interest only for a period of 12 months, thereafter repayments will include capital and interest. When topping up an existing study loan, you may repay interest only for a further 12 months,” adds ABSA.
Applications: According to Absa to qualify for the loan, you must be a South African citizen or person living in South Africa permanently and earn more than R3 000 a month. The student is required to be based in South Africa. The loan can be in the name of:
- A parent, who has proof of income
- A sponsor or guardian, who has proof of income
- A part-time student, who is full-time employed and has proof of income.
You can apply at any Absa branch or student bureau.
Nedbank: If you’re in need of financial assistance to cover tuition fees, student accommodation, textbooks and other study-related equipment, Nedbank could be an option for you.
Repaying your loan: Nedbank offers a competitive interest rate and flexible repayment terms:
- Students who must complete community service, internships or articles to complete their chosen field of study are granted a repayment grace period.
- Competitive credit life cover for death or disability is available.
Applications: “To apply for a Nedbank Student Loan, the student and guarantor (if any) must bring the documents set out below to their Nedbank branch. Anyone with sound financial standing may stand as guarantor. The guarantor will be responsible for interest repayments during the studies. Fulltime students must be supported by a guarantor when applying for the Nedbank Student Loan,” explains Nedbank.
To apply visit your local Nedbank branch.