Minimum and maximum loan periods vary between 1 months and 10 years. Comparison interest rates vary between 6.55% and 60% p.a. Total interest repayments vary between R685.05 and R844.12 over the life of the loan. *Comparison rate is based on an unsecured loan of R20,000 for a term of 3 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. These rates can change without further notice. All rates quoted are per annum. For more information regarding fees click on "View fees & additional info +" for each product or contact the provider.
Finding the best student loans in South Africa
Are you dreaming of becoming a doctor, lawyer, or designer? Whatever your dream is, a student loan can take you there. There are, however, a lot of things to consider before submitting your student loan application.
Things you need to consider before applying for a student loan
Talk to anyone who is currently repaying their student loan, and they will most likely tell you the same thing. Most people wish they knew several things before they applied for student loans.
One of the most widespread misconceptions about student loans is that they are “good debt”. Indeed, getting into debt to pay for your education is probably better than going into debt to pay for an iPhone. We can all agree, however, that eventually, both loans have to be paid back. A loan is a loan, no matter what you call it.
How much can I afford?
One thing you should consider is that getting a loan approved doesn’t mean you can afford to pay it back. Before you submit your student loan application, you need to take a look at how much your total repayment will be. That is what will help you to decide whether you can afford the loan or not.
If it doesn’t seem like you’ll comfortably make the repayments, you might need to avoid taking the loan.
Student loans vs other forms of debt
Student loans are quite different from other types of debt, like personal loans. The key difference between student loans and other loans is that with student loans, you can never officially declare bankruptcy.
Firstly, anyone who is about to submit a student loan application needs to understand that no matter what happens, they will pay it back. If you fail to pay your student loans, your lender can take your wages, and there is little you can do to stop it.
Secondly, if you owe your credit card company and you are considering bankruptcy, they will do everything possible to ensure they get something back. A student loan company will not do that; they know they are getting their money from you no matter what.
Therefore, one solid fact remains: If you get a student loan, you have to be sure you will pay it back. Unlike secure loans, the collateral of the student loan is YOU.
A checklist before applying for student loans
Below is a checklist for responsible student loan borrowing:
- calculate how much money you already owe, and how much you need for each remaining year of college;
- student loans have different interest rates, find out how much yours is by using the calculator on this page;
- find out if there are any extra fees and fixed standard bank charges by clicking the “view fees and additional info” below each loan;
- calculate the total amount of money you will have to pay after you graduate;
- compare different student loans and the available payment plans;
- think about how much you might be making after you graduate; and
- decide if this is something you can afford.
How to apply for student loans
You can either make a student loan application online or by visiting a branch of the loan providing company. The company will then provide details on how you can make your application.
Student loan requirements
Institutions that provide loans for students in South African generally have the following requirements.
- the student has to be over 18 years of age;
- proof of registration with a South African tertiary institution;
- your latest examination results from the Department of Education;
- an invoice showing fees, accommodation costs, and required textbooks;
- some companies require you to open a student loan account;
- state whether you are studying full time or part-time; and
- year of study.
What to avoid when applying for a student loan
While student loans might offer you a way to access money for your education, you should always consider your ability to pay back before you apply. Furthermore, a loan is a serious expense to take on, so you should consider your financial circumstances.
You should never use money obtained from a student loan for anything else other than the intended purpose.
It is not a good idea to begin your adult life with debt. If you do not need a student loan, then avoid taking one at all costs.
Never take a student loan without first comparing the available options. Some student loans are better than others, and you might miss out on better opportunities if you do not do your research.
Are student loans good or bad?
It’s difficult to say whether it is a good or bad idea to apply for a loan because it largely depends on the circumstances. If taking a study loan to pay for your tuition fees is the only way for you to continue with your education, then it would be a great idea to apply for one.
When am I required to start paying back a student loan in South Africa?
Most loan companies (banks, usually) ordinarily allow the student a grace period of about 3-6 months after graduating before they expect them to start paying back. The idea is to give the young graduate a fair chance to find a job and earn an income.
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