What is Affordable Study Loans?
This If total student loan debt at graduation is less than the student’s annual income, the borrower will be able to repay the student loans in ten years or less.
Affordable Study Loans In South Africa
Student loans in South Africa:
Make your career dreams a reality
Are you set on getting a tertiary education but can’t afford it? Get a student loan and make your dreams of studying further in South Africa a reality.
University education is your ticket to a well-paid job, successful career and good lifestyle; at the same time, higher education in South Africa is very expensive.
Many families do not have sufficient savings to support their children throughout university. In this situation, a student loan is an effective solution. Find out how a student loan works.
The different types of Student loans
There are student loans which are available via the National Student Financial Aid Scheme, abbreviated as; NSFAS which is managed by the South African government.
There are also student loans from private lenders including the big four South African banks and some independent credit providers.
The National Student Financial Aid Scheme (NSFAS)
The NSFAS loans are available to South African students who are enrolled in one of the 25 public universities in the country. They are designed to help you cover all of your expenses including tuition fees, accommodation, food, travel expenses and spending on books and materials.
How much can I borrow from NSFAS?
Loan amounts are determined on an individual basis. The interest rate is 80% of the repo rate. This is considerably lower than the interest rates charged by banks on student and personal loans.
NSFAS Loan Application
In order to qualify, you have to pass the NSFAS Means Test and to have good academic performance.
There are no financial or collateral requirements which parents, guardians or sponsors have to meet.
The repayment of the government student loan begins only after you graduate and start earning an income which is higher than R30,000 per year.
If your annual income is lower than R59,000, the payments will be 3% of your yearly salary. If it is higher, then they will be equal to 8%.
Student loans from a Bank in South Africa
These student loans are also intended to cover all of your expenses as a student including tuition fees, accommodation expenses and expenses on textbooks, study materials and travel just like a Government backed loan. However, they work slightly differently.
A surety has to apply on your behalf. This is typically a parent or a guardian, but it can be a sponsor who agrees to support you. The surety has to have sufficiently high income and sufficiently low debt plus good credit score in order to secure the loan.
Student loan amounts
The loan amount is determined individually based on the needs of the student. The disposable income of the surety is also taken into account. The interest rates are higher than those on the NSFAS. However, they vary from one lender to another so it is important for you to compare as many different offers as possible.
Rates will depend on the creditworthiness of the surety
The repayment structure of the bank student loans are divided into two periods.
The first period encompasses the period during which the student is in school. During this period, your surety will have to make interest payments only. When you graduate, you will have to pay back the remainder of the interest and the principal in the form of monthly installments.
The repayment term will be fixed in advance
Grace periods are granted to graduates who have to complete an internship or do voluntary work. It pays off to compare the different student loan options before you apply for a loan or a programme in a university in South Africa.
Below are Cheapest Student Loans In South Africa
3 Cheapest Student Loans In South Africa
Education is a vital process that not only arms a person with the knowledge and ability he needs, it also opens the doors to greater financial security and helps one to climb the social ladder. The problem is that education is expensive. The availability of funding is therefore one factor that can determine how far one can go in his academic quest.
1. Capitec Bank Student Loan
The Capitec Bank Student Loan can give you from R10,000 to R25,000 at first asking. This loan will give you between 1 to 84 months to pay it off, and it is completely flexible; you get to choose the amount and tenure that suits you.
With an interest rate of 12.90%, this is one of the cheapest student loans in South Africa.
Phone Contact: 0860 10 20 43
2. ABSA Student Loans
ABSA is a well-established financial institution that offers entry-level banking, and various credit facilities. The ABSA offers that offers one of the cheapest students loans in South Africa, their student loans are very flexible:
The minimum amount you can take out with an Absa student loan is R15 000, while the maximum amount is R250 000. You may need to take a loan every year to cover your tuition and other expenses.
Phone Contact: 0860 100 372.
3. Student Loans from Standard Bank
The standard bank student loan is one of the cheapest loans in South Africa. The bank allows you to pay interest rates as low as 7% interest per annum (terms and conditions apply). With this loan, you can get from R10,000 at the first asking, and then work your way up if need be.
You can register for a Standard bank student loan via: https://www.standardbank.co.za/southafrica/personal/products-and-services/borrow-for-your-needs/student-loans/student-loans/apply-for-a-new-student-loan.
How much can I get for a student loan in South Africa?
A maximum loan allowance of R60,000 is put aside for accommodation. Lastly, tuition fees are fully based on how much fees are required by the college. Standard Bank allows students the opportunity to even increase their loan limit.
Who qualifies for a student loan in South Africa?
To qualify for the loan, you must be a South African citizen or person living in South Africa permanently and earn more than R3 000 a month.
The loan can be in the name of: A parent, who has proof of income. A sponsor or guardian, who has proof of income.
What are the 4 types of student loans?
There are four types of federal student loans available:
Direct subsidized loans.
Direct unsubsidized loans.
Direct PLUS loans.
Direct consolidation loans.
What documents are needed for student loan?
Documents required for Education Loan
KYC documents.
Bank Statement / Pass Book of last 6 months.
Optional – Guarantor Form.
Copy of admission letter of the Institute along with fees schedule.
Mark sheets / passing certificates of S.S.C., H.S.C, Degree courses.
How long does it take to approve student loan?
It can take up to six weeks to process student finance applications. Make sure you apply early – even if you have a conditional offer – as you can amend or cancel your application if your plans change.