Applying for a student loan can help you pay for anything study related—from tuition fees to accommodation and textbooks.Â
Student loans are especially important to individuals who are otherwise unable to afford the costs that come along with being a student in South Africa. Luckily student loans are readily available in South Africa, and the application process is fairly simple.
In this article, we reveal the steps you need to take to apply for a student loan in South Africa.
Table of Contents
1. Choose a Student Loan Provider
There are many financial institutions that offer student loans, including big banks like First National Bank (FNB), Absa Bank, Nedbank and Standard Bank. Every bank will offer you a different interest rate, which is the fee that a bank charges you to loan money from them.
To help you decide which interest rate will work best with your budget, we’ve outlined the interest rates of FNB, Absa Bank, Nedbank and Standard Bank:
First National Bank (FNB) Student Loan
First National Bank (FNB) offers personalised interest rates for students that are dependent on their monthly expenses as well as their income.Â
The benefits of the student loan interest rates at FNB can be found below:
- Personalised interest rate: With FNB, Students are given an interest rate that starts at less than 0.5% and that goes up to R300 000.
- Flexible payment options: FNB offers students flexible payment options when it comes to their student loans. Students only pay interest and fees for a 12-month period. Thereafter, they then start repaying interest, fees, charges and other capital.
- Credit life insurance: Students acquiring a student loan from FNB can reap the benefits of credit life insurance, meaning the student and principal debtor are covered in the event of death, temporary or permanent disability, retrenchment or inability to earn an income.
Absa Bank Student Loan
Absa Bank offers study loans that allow them the opportunity to borrow funds at a low-interest rate so that students can support themselves, or someone else, while they are studying.
An outline of the benefits of a student loan with Absa Bank can be found below:
- Cover your whole study experience: With Absa Bank, Students are able to finance their full educational costs, including tuition fees, accommodation, textbooks and technical equipment.
- Low-interest rates: If you find a lower interest rate at another financial institute, Absa claims that it will be able to beat it, guaranteeing you a low-interest rate on your study loan.
- Pay interest for your study year only: Students who get a study loan with Absa Bank will only need to pay their interest for the first 12 months, meaning they will only have to start repaying their study loan in month 13.
Nedbank Student Loan
Nedbank offers a flexible study loan solution for students looking to complete full-time and part-time studies. If you are a full-time student, you only have to start repaying your student loan after you’ve completed your studies. If you’re a part-time student, your repayments will be made up of your loaned amount and you’ll need to pay the monthly interest rate from the start.Â
The full benefits of a student loan with Nedbank can be seen below:
- Flexibility: Students who acquire a student loan with Nedbank have the option of settling their debt either during or after their study duration.
- Preferential interest rates: If you are a high-achieving student with outstanding academic performance, you will be able to enjoy preferential interest rates with Nedbank.
- Credit life insurance: Students who have a study loan with Nedbank will have the option of taking out a credit life insurance plan on their student loan, protecting them from any major life events and unexpected or unforeseen circumstances.
Standard Bank Student Loan
Standard Bank offers study loans to both full and part-time students and has made it easier for students who require access to study equipment, such as laptops or tablets.Â
The advantages of acquiring a study loan from Standard Bank can be viewed below:
- Study overseas: Standard Bank will enable students to apply to any one of its SAQA-approved institutions, meaning you’ll have the advantage of selecting a programme overseas should you choose to do so.Â
- Instant quote: Get an instant quote for your study loan before you even apply. You can get an instant quote for your student loan on the Standard Bank website by selecting the’Do I Qualify’ option.
- Loan protection: Make sure you’re covered with Standard Bank’s student loan protection insurance, which covers you in the case of death, disability or dread disease.
- Low-interest rates: Get a student loan that starts at a low-interest rate of roughly 9.75%.
To apply for a study loan at any one of the aforementioned banks—whether it’s FNB, Absa Bank, Nedbank, or Standard Bank—you can visit any branch of your selected provider or call them to fill in the application form. Some banks also allow you to apply on their website, so check that first, if it is easier for you.
2. Get Surety for Your Student Loan
When applying for a student loan at a bank, you need to make sure you have someone to stand surety for you. This person must take responsibility to make sure that your study loan is repaid even if you cannot pay it. Usually, parents or guardians who are earning a minimum monthly income of R3 000 – R6 000 can stand as surety for your study loan.
If you cannot get someone to stand surety for you, don’t worry, there are other options for you to consider:
- If you are a part-time student who earns around R5 000 a month, some providers will allow you to stand surety for yourself.
- Otherwise, the National Student Financial Aid Scheme (NSFAS) offers loans to students who don’t have anyone to stand surety for them.Â
The National Student Financial Aid Scheme (NSFAS) is the South African government’s way of helping you pay for your studies.
3. Make Sure You Qualify for a Student Loan
Banks and other financial institutions have strict requirements that you need to meet in order to apply for an education loan. Most providers require you to have:
- South African ID
- Proof of residence
- Proof of registration from an educational institution
- Latest payslip of the person standing surety
- Three months’ bank statements
- Proof of university costs
Remember that all of these documents must not be more than 3 months old. Some finance providers also have special requirements and fees that may not be mentioned above, so be sure to check out your chosen bank’s student loan webpage for extra information that you might need.
4. Get a Fundi Student Loan
If you don’t want to apply for a student loan from a bank, you could apply for a Fundi study loan. Fundi’s study loans cover registration fees and any other outstanding student fees that you might have.
To apply, follow these easy steps:
- Go to the Fundi website.
- Choose the type of study loan that you want.
- Click ‘Apply now’.
- Choose the ‘Get quote now’ option.
- Follow the instructions to fill in all of your details.
After submitting all of your relevant information, you should get a quote from Fundi within 48 – 72 hours. You will then have the option to accept the loan and its repayment terms. Once you’ve accepted these, your loan will be paid directly to your educational institution, on your behalf – so there is no extra fuss for you to worry about!
Repaying Your Student Loan
Student loan debt should be avoided at all costs, which is why it’s important to have a strategy in place for when you need to start repaying your study loan.
Luckily, we’ve come up with a game plan to help you start paying back your student loan and become debt-free as soon as possible.
