Have you just finished school? Or do you have a child that has just finished school?
If so, it’s that time of your life where you need to make some important decisions for your future and getting a tertiary education is most likely the first one.
Unfortunately, there are households and high school graduates that have all the passion and none of the funds to pursue them. Tertiary education is expensive and it’s become a massive problem, not only for the individuals that route from low-income households, statistics show that even the working middle-class homes are struggling to afford to put their kids through university.
When these types of financial burdens are bestowed on the youth in this country, you can only imagine the difficult task they are faced with in how to move forward in pursuing their dreams and careers. Education is fundamental for the growth of our country and its economy, hence why lending and banking institutions decided to take it upon themselves to tailor a loan offer to these youth, so that they may still be awarded the opportunity to study despite not being able to afford the fees upfront.
Student loans have been around for many years and have been helping students get through their degrees and diplomas without the stress of how they’re going to pay it, which as we know could have a negative impact on one’s studies, if worrying over a financial burden was at the front your mind day in and day out through your lectures.
How do Student loans work?
The student that wishes to study, needs to have a parent or legal guardian that earns an income before being able to apply for a student loan. Student loans are esentially personal loans which are given to a student with their parent or gaurdian acting as the co-signer. Once that basic requirement is met, the loan agreement is drawn up. The stipulations are that the parent or guardian will pay the interest portion of the loan monthly for the duration of the loan and the capital of the loan is in the students’ name which is only payable upon graduating via monthly instalments.
Don’t be too concerned if you don’t start working straight out of your studies either. Lending institutions understand that you still need to go through the process of applying for jobs and finding work before you begin earning an actual income. That is why they typically allow graduated students a time frame of between 3-6 months to get their first stream of income in order before having to start with any repayments. This period can also be negotiated if there is any reason that you are struggling to get a job. As we’re all aware, South Africa’s unemployment isn’t where it should be and often that can leave students struggling to find work when they’re fresh out of university.
Should this period reach its end and there’s no income in sight for the student, then the parent or guardian that signed as surety over you would be obligated to start making the repayments on a monthly basis?
Is this loan my best option?
Considering the fact that you have most likely looked into a student loan for reasons that point to you not having access to the funds yourself, it certainly is a good idea to opt for a student loan. If the alternative is not studying then the answer is a resounding YES! Don’t let the idea of a loan worry you, especially if you’re not the type who is fond of debt in the first place. This loan is going to set you on the path to greatness within your own passion and desires to earn a living and it can be the first and last loan you ever need to have applied for!
The other options when comparing whether it’s the best type of loan for your studies, well again, the answer is yes. For the simple reason that with all other loan types, you are required to start repaying the loan immediatelyl, this is the case with personal loans as well as short-term loans which are not ideal for paying for your studies. Student loans are tailored to the lifestyle needs of a student, which are directly in line with the obvious lack of sustainable income at the time one applies for a said loan. That is why if you’re planning to study, don’t have access to funds and need a loan, a student loan will bring the best benefits to the person applying.
What do I need before thinking of applying?
You need to be a valid citizen of South Africa with proof of identification. Your parent or guardian is required to earn a monthly income and will need to produce a payslip as proof, preferably the most recent payslip. Proof of residence where you parent resides in the form of a utility bill and last but not least the proof of enrolment at the university where you have enrolled. Your gaurdian cannot be undergoing debt counselling or have extensive debts.
We know it’s a daunting process, approaching a bank in order to borrow money, but it really shouldn’t be. This is also the most exciting part of your future, as it’s the start! You’re taking that first step to achieving all the dreams you have set for yourself and someone is going to help you realise them with a little helping hand.
So, walk into the lending institution with your head held high, complete the forms that are required of you, hand over all of your personal details and get ready to pursue your tertiary education with no financial weight on your shoulders. You can also apply to most lenders by completing an online loan application.
How much does the student loan cover?
Good question. Just because a bank or other registered lender is ready to lend you money, doesn’t mean that it’s a bottomless pit of money for the best degree at the best university with prestige boarding cover. There is an amount that will be calculated that will cover all the necessary expenses to get through your tertiary education, but it is in line with the income bracket and credit history of your parent.
That said, your cover includes the tuition fees, the textbooks, the accommodation and whatever else is required to cover your education. It’s important to remember that the larger the loan – the larger the repayments, so if you plan on paying this back (which you’re obviously obliged to do as per the agreement) it is a fundamental component to take into account. Will you be earning enough to pay the instalments? If you’re studying to be a lawyer, perhaps! Then you might choose a more esteemed college. If you’re studying to be something a little lower earning, consider your choices.
Just make sure you choose the best university to suit your career needs and the best lender to suit your financial needs. You should also remeber that it is crucial to apply early as student loan payouts are typically very slow - remember these are not small quick loans that you can get in 24 hours.
Are there other ways to receive funding for my studies?
Yes. If you are a student that has proven themselves with exemplary scores in their high school report and in other academic fields, it is quite likely that you could qualify for a bursary. There are plenty funding options out there that might offer certain products and services that could help you through studying with the added benefit of not having to fully repay that which you have borrowed. Do your homework – you’ll be surprised at how many people are invested in seeing you realise your educational dreams, you’re not alone!