STUDENT LOANS FROM A BANK
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.