This article contains 5 major steps on how to apply for student loans in South Africa.
Education can be expensive in South Africa, particularly at the tertiary level. The cost of tuition and fees at South African universities varies depending on the institution and program, but it can be quite high, regardless. According to businesstech, the average cost of tuition for the first year of a degree in South Africa costs approximately R62,000. The cost of tuition and fees at some private universities and colleges can be significantly higher. Additionally, the cost of living expenses, such as room and board, can also add to the overall cost of education in South Africa.
Despite the cost of education, the importance of acquiring a degree cannot be overemphasized, hence the struggle by most scholars to get educated through any possible means. There are so many ways to get funding for studies in South Africa. One very common means is via scholarships.
Well, the fact remains that not every student will have access to grants and scholarships due to their competitiveness, but the case is different for student loans.
Student loans are a type of financial aid that helps students pay for their education. These loans are of different types and are typically provided by the government, but can also be offered by private organizations like banks, Fundi (South Africa’s leading education finance and Fund Management Specialist), etc.
In South Africa, student loans are offered by 5 major banks:
- Absa
- First National Bank (FNB)
- Standard Bank
- Nedbank
- Capitec
Students who take loans are responsible for repaying them, usually after they have graduated or left school. The terms and conditions of student loans vary depending on the lender, but they generally have lower interest rates than other types of loans and offer flexible repayment options
If you decide to use a student loan to fund your studies, it is important to consider which financial institution is suitable for you. Here are some details about each of the above-mentioned financial institutions that may help you in making the right choice.
In this article, we will be showing you 5 major steps on how you can apply for a student loan in South Africa.
5 STEPS TO APPLY FOR STUDENT LOAN IN SOUTH AFRICA
Without further ado, to apply for a student loan in South Africa, you will need to follow these steps:
1. Check Your Eligibility
Before applying for a student loan, you should check whether you are eligible for one. Generally, you need to be a South African citizen and have a good credit record to be eligible for a student loan. Here are other important eligibility requirements:
- Proof that you have been accepted or enrolled in a South African university or tertiary institution
- You must be 18 years old and above.
- The surety, i.e anyone responsible for signing the loan for you, (usually your parent/guardian), must earn a certain minimum income each month.
Consider lenders both inside and outside of South Africa that may offer you more favorable terms and conditions. If you’re a student in South Africa looking for loans, there are several lenders both inside and outside of the country that could offer favorable terms and conditions.
Inside South Africa, some of the lenders to consider include:
- First National Bank (FNB)
- Standard Bank
- Nedbank
- Capitec Bank
- African Bank
- Wesbank
- STFN Loans
Outside of South Africa, some of the lenders to consider include:
- CitiBank
- Barclay’s Bank
- HSBC Bank
- Lloyds Bank
- American Express (Amex)
2. Check your credit score
A higher credit score can help you get access to better loan terms, so make sure to check your credit score before applying for any loans. There are several online services that provide reports on your credit score based on an analysis of your financial history. Some of these services include Compuscan, Experian, XDS, and TransUnion. Each service offers different tools to review your credit score and help you make informed decisions about applying for a loan. Therefore, take some time to review these reports so you can be confident about your creditworthiness when applying for loans.
3. Gather all required documents
Once you understand the different types of loans available and have checked your credit score, it’s time to start gathering all the necessary documents for the application. You will need to provide certain documents to support your application, this includes:
- Your ID document
- Proof of residence, and proof of income (if you’re working).
- Your parent(s)/ guardian(s) identity card and last 3 salary slips from your surety.
- Proof of enrollment at a recognized tertiary institution.
When you go to the financial institution, you will hand in all these documents, fill in relevant forms, and provide the amount you need to cover your studies. Be aware that different lenders may require additional documents or information so make sure to read their terms carefully before submitting the application forms.
3. Choose A Lender
Once you have met the requirements for a student loan, you can start researching various banks to compare their offers. You can apply for a student loan from various lenders, including banks, credit providers, and the National Student Financial Aid Scheme (NSFAS).
Before making your choice, be sure to compare the interest rates as well as repayment terms.
These may vary depending on which bank you choose to go with.
4. Complete The Application Form
Each lender will have their own application form, which you will need to fill out and submit along with the required documents. This process often starts online and gets completed offline.
5. Wait For Approval
After submitting your application, you will need to wait for approval. The approval process can take several weeks, so be sure to plan accordingly.
6. Follow up on application status
In addition to waiting for approval, do not hesitate to follow up with the lender regularly until they give you an update on its status. Don’t forget that they must also provide an explanation should they choose not to approve or reject your application within a certain timeframe per South African legislation.
CONCLUSION
It is important to note that taking a student loan is a serious financial commitment, and as such should consider all the long-term implications before applying. Be sure to read the terms and conditions carefully and seek advice if you have any doubts.
With these in mind, you will need to start repaying it once you have completed your studies. Be sure to budget accordingly and make your repayments on time to avoid any additional charges or penalties. You shouldn’t also forget that there are numerous loan providers both inside and outside of South Africa that can provide favorable terms and conditions. Additionally, there are multiple online services available that can help you review your credit score and make informed decisions when applying for a loan.
Read more: Types of Student Loan in South Africa
Don’t miss out on current updates, kindly like us on Facebook & follow us on Follow @Eafinder OR leave a comment below for further inquiries.
