What is a Study Loan?
A student loan or study loan is a term that is used interchangeably. From here on, we’ll call it a study loan.
This is a loan that is used to pay for your studies. Usually, you’re required to pay the interest while you’re studying, and then repay the loan once you’ve completed your qualification.
This loan is usually paid directly to the institution through which you’ll be studying. If you’re studying full-time, you might need someone to stand surety (this means that if you aren’t able to repay the interest or the capital (the actual loaned amount), once you have finished your studies, the surety will be responsible for the debt). This person might be a parent or guardian.
Frequently Asked Questions about Study Loans
How Much Can I Borrow?
The amount you are able to borrow will depend on a few things, like the cost of your qualification, the bank (or financial institution) through which you apply for the loan, and other study-related expenses.
What Expenses will the Loan Cover?
The expenses covered by the loan will be outlined when you apply for the loan, so you’ll need to make sure that you check up on this. Usually, a loan will cover the cost of your study modules (or subjects), but it could also cover textbooks, living expenses and even transport.
How Do I Apply for a Study Loan?
To apply for a student loan, you’ll first need to decide what type of loan you want to apply for. There are two main types you should be looking out for – those offered by private lenders, like banks, and those offered by the government.
NSFAS Student Loans or Financial Aid
NSFAS loans are open to students enrolled in any of the 25 public universities around the country. This type of loan covers all of your expenses as a student, including tuition, accommodation, food, travel and study materials (including textbooks). The loan amount is dependent on the individual applying and the interest rate is generally much lower than those charged by banks.
You can apply for an NSFAS loan online. You’ll need to pass the NSFAS Means Test first, and you need to prove that you’re a good student (usually by submitting your exam results from the previous year). This type of loan usually doesn’t require that a parent or guardian sign as a surety.
If you’re applying for a loan after being out of school for a period of time, such as a few years, simply contact the NSFAS.
You’ll only start to repay the loan once you have graduated and you’re earning more than R30 000 every year (or R2 500 per month). In instances where your annual income is less than R59 000, you will be expected to repay the loan at a rate of 3% of your yearly salary. If you’re earning more, you might be expected to pay as much as 8% of your yearly salary.
You can apply for a study loan through a bank or independent financial institution. These types of loans will range from covering your tuition to covering your study materials, travel
When applying for this type of loan, you’ll need to have someone apply for surety on your behalf. This is usually someone with a high enough income and
Interest rates are higher for bank study loans than government loans, so it’s usually a good idea to compare the different rates offered by different banks before you decide on the most suitable one.
Applying For A Bank Student Loan
You must submit:
- Your ID (including a copy)
- Your parent or sponsor’s most recent payslips (usually three months)
- A recent utility bill
- Proof of tertiary institution registration
- Breakdown of institution fees
- Registered with one of the
recognisedtertiary institutions within SA
- Your sponsor must be earning a minimum amount per month. (This amount varies from bank to bank.)
The FUNDI Study Loan
You can apply for different types of FUNDI study loans, including:
- a study loan to cover your registration, tuition and exam fees
- a loan to cover the costs of your study materials (including textbooks and technology)
- a loan to cover the costs of accommodation.
You can apply for a FUNDI loan on their website (https://www.fundi.co.za) or by calling 0860 55 55 44.