Student loans are an important financial tool for many students in South Africa. These loans offer a way for prospective students to finance their education by borrowing money that they will pay back with interest once they graduate at a tertiary institution.
According to statistics, many graduates face financial challenges of paying back their student loans, which ultimately damages their credit scores. This is why is always advisable to manage your student loan repayments.
Managing your student loan repayment requires a lot of discipline and planning as it is important to stay on top of your payments and avoid defaulting on your loan.
Here’s some tips to manage Student Loan repayments:
- Choose your bank wisely: only take out a loan from a recognised and registered bank or institution.
- Understand your loan: Make sure you understand the terms and conditions of your loan, including the interest rate, repayment period, and any fees or penalties for late payments.
- Create a budget: Begin by drawing up a budget as soon as you graduate. Create a budget that includes your loan repayment as a monthly expense. This will help you ensure that you have enough money to make your payments on time.
- Pay more: If possible, pay more than the minimum payment each month. This will help you pay off your loan faster and save on interest charges.
- Prioritize your loan: If you have multiple loans, prioritize your student loan repayment over other debts. This will help you avoid defaulting on your loan and damaging your credit score.
- Stay in touch with your bank: If you are having trouble making payments, reach out to your lender to discuss your options. They may be able to offer a temporary payment plan or deferment.
- Certified Financial Planner: When in doubt, seek the advice of a Certified Financial Planner, who will assist you with the entire process.
Cost of Higher Education
One of the biggest barriers to access is the high cost of tuition and other fees associated with higher education.
The cost of higher education in South Africa has increased tremendously over the years. Many students do not have the financial means to pay for college or university, and for majority the only option they have is to take out a student loan.
This is especially true for students who come from disadvantaged backgrounds and low and middle-income families that do not have the financial support to cover their expenses during their studies.
Some student loans cover expenses such as tuition fees, registration, textbooks, housing, and other student related costs.
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