STU­DENT LOANS FROM A BANK

DRUM - - Advice -

These loans are awarded for pre- and post­grad­u­ate stud­ies at public or pri­vate in­sti­tu­tions ac­cred­ited by the South African Qual­i­fi­ca­tions Au­thor­ity. Short cour­ses also qual­ify but there are usu­ally con­di­tions, such as the course must be at least two months in du­ra­tion.

Gen­eral re­quire­ments for ap­pli­ca­tion:

You must be a South African cit­i­zen and earn more than a cer­tain monthly in­come (for ex­am­ple R3 000 a month). If you don’t earn an in­come – as is of­ten the case – a guar­an­tor (for ex­am­ple, a par­ent or guardian) with full-time em­ploy­ment, proof of in­come and a good credit score takes out the loan on your be­half. You’ll need proof that you have been ac­cepted at a ter­tiary in­sti­tu­tion.

HOW IT WORKS

Stu­dent loan amounts vary. It’s usu­ally awarded on an an­nual ba­sis so if you’re con­tin­u­ing your stud­ies, you’ll have to ap­ply again for the next year.

Gen­er­ally, the in­ter­est on stu­dent loans is less than on other debt, such as credit cards and per­sonal loans. The spe­cific in­ter­est rate is cal­cu­lated ac­cord­ing to the guar­an­tor’s risk pro­file.

There are ad­di­tional ex­penses, such as in­ter­est, ser­vices fees, and in­sur­ance for the guar­an­tor and stu­dent in the case of death or per­ma­nent dis­abil­ity. The guar­an­tor is usu­ally re­spon­si­ble for pay­ing these ex­penses for the du­ra­tion of the study pe­riod.

Once the stu­dent grad­u­ates, the loan be­comes their re­spon­si­bil­ity. If they drop out be­fore grad­u­at­ing, they have to start re­pay­ing the loan im­me­di­ately.

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