What is a student loan?
Are you thinking of furthering your studies? Do you need money now to gain a greater education and earn a higher monthly income? There is never such a time as now!
If you need help finding money to pay for your education then a student loan is what you will need. One thing to keep in mind though is that the regulations, interest rates, terms and repayments for a student loan differ a lot between different banks and lenders.
Some of these terms could be:
- You can only access a student loan in your second year of studies.
- You can only get a student loan once you have a report or proof that you are registered at a South African tertiary education organisation.
- If you study part-time, you need to repay the loan while you are studying.
- If study full time, you will begin repayments 2 months after your final year results.
- If your studies took you 3 years to complete, then you will have 3 years to repay your study loan. The length of your studies is directly proportional to the repayment period of your loan.
Student loans cover a variety of costs which include and also exclude costs like lecture costs, general expenses like books, lectures, university activities and also lifestyle expenses like residence and food. It all depends on which lender you choose and what you are looking for.
What will a student loan application process usually look like?
You will generally need to apply for a new student loan at the beginning of each year. You can view this loan as something similar to a personal loan - the more you take out or borrow, the more you will need to repay. If you are wanting and qualify for a full student loan that includes books and accommodation, your total amount that you owe back to the lender increases accordingly.
The lender will require you to declare a principal debtor. This is someone who can stand as surety onyour behalf for the lender. Although the loan will only be repayable after your studies, the principal debtor will need to pay off the monthly interest on the student loan until such a time.
What documents will you need?
- Copies of the principal debtor and the student's green bar-coded South African ID
- Latest payslip
- Proof of residence
- Proof of enrolment from the educational institution
Banks & Student lenders
All of the following five big banks in South Africa offer their customers an option to apply for a student loan:
- Standard bank
The amount and repayment terms differ dramatically from bank to bank.
There are other, specialized lenders, excluding the banks, that also offer finance for future students. This is usually the route for someone that does not wish to loan money from a bank but finds more favourable terms at a specialized student loan provider. It remains important to review all the details involved in a student loan application and repayment terms.
What a Student Loan is not: The Difference between a Bursary and Scholarship
What is a Bursary?
A bursary is a cash award made by an institution to individuals or groups of people who cannot afford to pay full fees. In return for the bursary the individual is usually obligated to be employed at the institution for the same duration as the bursary. According to the Good Schools Guide, a bursary is "usually for helping out the impoverished but deserving and those fallen on hard times."
What is a Scholarship?
A scholarship is an award of financial aid for a student to further their education. Scholarships are awarded based upon various criteria, which usually reflect the values and purposes of the donor or founder of the award. Scholarship money is not required to be repaid.
It is a privilege to be accepted and to complete your tertiary education. South Africa boasts some top Universities that are well recognized by international business institutions and there are various scholarships available for the diligent students.
The majority of the South African population are unable to attend University due to not qualifying or are unable to afford the price tag that comes with gaining a tertiary education. Many of the South African Universities offer scholarships to outstanding students. The offers could be for achievements in Sport, Academics or Arts and Culture.
Here is a list of some of the Universities that offer Scholarships to students:
- University of Cape Town
- University of Stellenbosch
- University of Witwatersrand
- University of Pretoria
- University of Kwazulu Natal
- University of South Africa
It is more common to gain a small scholarship or bursary from a University in your first year. Once you have completed year one of studies, you need to reapply for your bursary and it is then possible to gain a greater discount on your studies.