Repaying your student loan is a costly expense that many students in South Africa have to endure. Luckily, we’ve come up with a game plan on how you can become debt-free as quickly as possible.
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1. Start Repaying Your Student Loan with a Part-time Job
If you have some time while you’re studying, it’s a good idea to get a part-time job so that you can start repaying the interest on your student loan while you study. This would be a huge advantage and could save you thousands of Rands in the long run.
Look out for student jobs available in your area, such as:
- Tutoring
- Babysitting, pet-sitting or house-sitting
- Shopkeeping/teller positions
- Waitron jobs
Not everyone is able to work a job at the same time as studying. In this case, the person who signed surety for you, such as your parent or guardian, might be willing to pay the monthly interest for you.
2. Start Repaying Your Student Loan Immediately
Once you’ve completed university, your loan provider will give you a 3-month-long grace period. You have this time to find a job and start paying back your loan.
While you are searching for a job to pay back your study loan, take some time to learn about the structure of your loan. This will give you more information on how repayments work, and how you can pay them off fastest.
If you do struggle to find a job, make sure to let your loan provider know as they can help you extend your grace period as necessary.
3. Draw Up a Budget For Your Student Loan
Once you are earning an income, sit down and draw up a list of all your expenses—including your student loan. This list can be used to form a budget, or plan, for how you are going to spend your money going forward. It also helps when drawing up a timeline for your student loan.
If you’re not sure how to set up a budget, then check out these tips to guide you:
Calculate Your Current Income
Calculating your current income, or how much money you have to spend each month, is the first step to setting up a budget for your student loan.
When you calculate your income, be sure to include only the amount that you have left over after your deposits go off. Leave out monthly costs like your phone, the Internet or any other monthly deductions you may have.
Once you’ve worked out how much money you actually have left over after you’ve made all your payments, you can then set aside a budget and start repaying your student loan.
Keep Track Of How Much You're Spending
Once you know how much money you’ve got to spare at the end of each month, you’ll be able to allocate a specific budget that will go directly toward your student loan so that you can start repaying. You can also then see how much money you’ll have left over after you’ve paid for your student loan.
Keeping track of your study costs will ensure that you don’t overspend and that you have more than enough money to pay off your study debt.
Prioritise Your Student Loan Debt
Prioritise your student loan repayments, and never aim to pay off the minimum possible repayment amount. Rather cut any unnecessary spending to maximise the money that you can put towards your loan repayments.
Remember, setting up a budget for your student loan helps you keep track of your finances so that you can avoid building up any more debt.
4. Set Up Debit Orders to Repay Your Student Loan
Your bank can help you repay your student loan with something known as a debit order. A debit order prevents you from forgetting your monthly loan repayment as it automatically deducts the amount that you need to pay for your student loan from your account each month.
Setting up a debit order is a great way to ensure that you always pay for your student loan on time, especially since repaying your student loan is important, and forgetting to pay could cause you to gain extra interest as a penalty.
However, it’s important to note that if you do not have enough money in your account each month for your debit order, you risk getting a bad credit score.
Having a poor credit score means you may have to pay more interest on your loans and some financial service providers may not even allow you to take out a loan with them in the future.
Be sure to budget wisely and always ensure that you are prepared for your debit orders so that you can pay off your loan without the added stress.
Get More Funding Guidance With FundiConnect
Planning out your finances can be difficult, which is why we’re here to help you out. Whether you’ve got a Fundi student loan or you’re looking for guidance on how to pay for your studies, FundiConnect has all the information you need to know about funding your studies.
Be sure to check out our funding guidance page to find out everything you need to know about funding your studies in South Africa.
