If you’re looking to further your education but can’t find a way to afford it, then getting funding for your studies via student loans in South Africa may be the way to go.
However, many students do not apply for student loans as they don’t know enough about what this funding option actually entails.
Whether you’re feeling confused about whether you should apply for a student loan, or if you’re just in need of more information before making your decision, you’ve come to the right place.
In this article, we cover everything you need to know about getting student loans in South Africa.
Table of Contents
How Do Student Loans Work?
A student loan is when a prospective student and a parent (with an income) apply for financial assistance in order to pay for study fees. With a student loan, the parent or guardian is required to pay the interest portion of the loan on a month-to-month basis while the student is studying. The capital amount sits in the student’s name, and the student is required to repay the loan through monthly instalments upon graduating.
Are Student Loans a Good Idea?
It’s difficult to say whether funding your studies through a student loan is a good or bad idea because it largely depends on the circumstances.
A key question to ask yourself is this: Will not taking a student loan prevent me from studying? If that is the case, take the loan and study. If you are able to study without taking a loan, it is a good idea to try to avoid taking one.
It is best to start life off without debt, but if you can get a leg up by doing so (by you gaining a tertiary education), then it probably is a good idea—just make sure you consider the below.
Interest on Student Loans Are Not Zero-Rated
There is a common misconception that student loans bear no interest, or very little. The complete opposite is true— there is a large amount of interest on student loans, comparable to any other household debt.
Studying From Home Will Save You Money
If you study away from home, depending on what you’re studying, your bill over a 4-year degree could come to around R400,000, which is why it’s important to carefully consider all of your university options. You may be itching to move out and be independent, but the price of the repayments may not be worth it.
Your financial service provider will calculate how much you need to repay after graduation based on your salary, so if you study while living at home, that’s closer to R200,000 to repay. It’ll take half the amount of time to repay a loan if you stay at home, so carefully consider this when getting a student loan.
You Are Given 3 to 6 months to Pay Back Your Student Loan
The loan issuer (a bank, usually) ordinarily allows the student 3-6 months after graduating before they are required to start making repayments.
The idea with this is to give the student a fair opportunity to find a job after graduating. If, however, the free pass term expires, the parent (or whoever else stood surety for the loan) will be required to cover the repayments.
What You Need to Apply for a Student Loan
Before you apply for a student loan, there are a few documents you will need to prepare before you can hand in your student loan application.
If you are applying for a student loan at a South African bank, you will need:
- Yours and your parent’s green, bar-coded ID book (or ID card)
- Your parent’s proof of income (latest payslip)
- Proof of address of your parent
- Proof of enrolment at a qualified tertiary institution
When you go to the bank, you’ll simply hand over all the documentation, fill in some forms (make sure you know the full names and level of your degree), and you’ll have to give them a number as to how much money you need.
The amount the bank gives you will, of course, be dependent on your parent’s credit history and income bracket. A piece of advice here is when the bank asks you for estimates of your expenses, provide low numbers – the algorithms won’t pick up on the fact that it’s impossible for a family of four to survive on R200 of food a month.
Study Loan Requirements in South Africa
Every institution will have a different set of requirements for your study loan application; however, there are a number of requirements that will apply to every institution. Those requirements are the following:
- You must be over the age of 18
- The principal debtor (typically a parent or guardian who signs surety on the loan for you) must earn a certain amount per month – this naturally does not apply to applications to NSFAS.
- You must be registered as a student with a tertiary institution in South Africa
South African Student Loan Providers
The biggest and best student loan providers include First National Bank (FNB), Standard Bank, Nedbank, Absa Bank, Fundi and the government’s National Student Financial Aid Scheme (NSFAS).
NSFAS is the biggest loan issuer in South Africa, and they’ll help you through every step of the process. The South African government has created NSFAS to help students who come from homes with little household income. This means that, if you are struggling to finance your degree and worried about having too much debt once you complete your studies, NSFAS is potentially the option you should look into.
However, if you’ve got a stable income and you’d like a convenient and comprehensive loan provider, then Fundi is definitely your best option.
Choose the Correct Student Loan Provider
With so many fantastic funding options available, it can be difficult to decide which financial service provider is the best choice for you. To help you decide which loan provider to go with, we have collected information from each loan issuer in South Africa.
Fundi Student Loans
Fundi has also made it incredibly easy to apply for a study loan online, making them an awesome choice for working students.
In terms of what Fundi has to offer, the financial service provider has the following student loan options available:
- Study loans (school and tuition fees, registration fees, exam and outstanding fees)
- Study tools (textbooks, technology, study equipment)
- Accommodation (covered during studies)
Benefits of a Fundi student loan:
- Fixed monthly repayments
- You need four documents to apply and will receive a response within 48-72 hours.
- No deposits
- The study loan is paid directly to the institution
- No limits
Note: Interest rates and repayments will vary according to the institution and the applicant’s profile.
Check out more information on Fundi’s website or phone 0860 55 55 44
National Student Financial Aid Scheme (NSFAS)
NSFAS is a helpful loan issuer in South Africa that specialises in helping individuals with low household incomes to access tertiary education.
If you are thinking of applying for funding through NSFAS, they will provide you with help through every step of the process. They are also willing to work with you if you do not have a parent that has sufficient income to stand surety for your loan.
For more information, check out our 10 FAQs about NSFAS. You can also contact NFSAS via phone and email below:
Telephone number: 0860 067 327
Email: info@nsfas.org.za
First National Bank Student Loans
First National Bank (FNB) does not only offer finance solutions but also provides students with study loans.
FNB’s student loans cover the following:
- Tuition fees
- Books
- Campus Accommodation
Benefits of an FNB student loan:
- Personalised interest rates
- Access to loans from R4,000 to R80,000*
- While you study, you only pay interest on your loan and can pay the rest after the student has graduated.
Note: A new application is required each year you start studying.
For more information check out FNB’s website or phone 0861 40 40 40.
Standard Bank Student Loans
If you are a full-time student, then applying for a student loan with Standard Bank will be perfectly ideal as you will get the Standard Bank transaction account—the option that will best suit your individual needs once your student loan is approved.
Before applying for a student loan through Standard Bank, it’s important to know that Standard Bank covers the following educational fees:
- Tuition fees
- Accommodation for students not living at home
Benefits of a Standard Bank student loan:
- Tuition and accommodation will be paid directly to 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.
- A once-off initiation fee and monthly service fee will be charged on your student loan.
Check out Standard Bank’s website for more information or phone 0860 123 000
Absa Bank Student Loans
Absa Bank is a great loan provider for students who are pursuing both undergraduate and postgraduate programmes in South Africa. An Absa Bank student loan covers the following.
- SETA and SAQA courses
- Textbooks
- Accommodation and equipment
Benefits of an Absa Bank student loan:
- Earn a monthly income of a minimum of R3,000 per month
- Approved based on their affordability and risk
- Pay the prime interest rate on their study loans
- Customers are offered a 15% discount on study equipment when they apply for a study loan
- The study loan forms part of the Student Package, which includes a student credit card and a cheque account
For more details go to Absa’s website or phone 0860 100 372
Apply for a Student Loan with Fundi
Once you have considered all of the options available to you, and you have made up your mind, you may want to apply for a student loan with Fundi.
For more information about acquiring a student loan with Fundi, be sure to visit the Fundi website and start enabling your educational dreams today.
