Once you have received an offer to study at an institution of higher learning, it is natural to start thinking of how you will fund your tuition fees and other essential expenses.
There are a number of options that are out there when it comes to how you can be able to finance your studies. These options include bursaries, study grants, scholarships, and student loans just to mention a few.
Most of these options have strict criteria, in which in most of them you need to be an academically deserving student and some of them close early.
However, this shouldn’t make you panic as there are other options such as working part-time or even taking out a student loan to cover all of your essential expenses.
When applying for a student loan, it is important to understand a couple of things about what banks look for if you are not earning income, said finance expert, Maya Fisher-French. A number of banks will allow someone else to sign surety on your behalf for the loan.
"This means that the parent's credit score actually starts to count and that can sometimes be a problem if the parent's credit score is not good."
Just like any other loan, student loans can impact your credit score in both positive and negative ways.
Factors that contribute to a person's credit score being low are late payments, not paying the full instalment on your other credit, over utilising your credit and also non-payments on your accounts.
According to the credit reporting company, Experian, improving your credit scores can help you qualify for lower interest rates and save you a lot of money in the long run.
Unlike personal loans and other credit, some experts have shared that student loan interest rates are lower.
Interest rates and repayment arrangements differ from one bank to the next.
It is therefore important that you also make sure that you review the student loan terms and conditions carefully before binding yourself in an agreement with a financial institution.
