The cost of an individual's tertiary education journey can be very expensive, and many households cannot afford to absorb these costs without financial assistance.
Student loans provide this financial assistance and allow students to obtain their tertiary education goals and pay back the money when they have secured employment.
Several banks and financial institutions in South Africa offer Student Loans to individuals. The terms and conditions of these loans will differ depending on the financial institution, the student and the cost of studies.
Understanding The Interest Rates And Terms Of Student Loans In South Africa
Interest
Interest is the amount a person pays to borrow money. Some banks require students or their guarantors to pay the interest while the student is still studying.
Factors such as the student's risk profile, repayment term, and loan amount influence the interest rate of student loans.
Terms and Conditions
Each bank or financial institution has its own terms and conditions for student loans. Eligibility criteria may include factors such as age, nationality, full-time or part-time enrollment, loan amount, and registration with appropriate bodies.
For example, Absa bank only offers student loans to students enrolled in specific types of institutions like public universities, TVET colleges and for courses that are registered with international quality assurance bodies.
Repayment terms will vary among financial institutions.
Nedbank requires part-time students to start repaying their loans immediately at the beginning of the academic year. Full-time students need to nominate a guarantor to make monthly interest payments, and the student starts repaying the loan once they secure employment.
Banks may offer a grace period after graduation for students to find a job. If a student cannot make repayments, a surety may be responsible for repayment.
Banks may offer fixed monthly instalments or income-driven repayment plans
Students are advised to research and understand the terms and conditions of student loans offered by different banks and financial institutions.
They can also explore other funding options such as bursaries. For information on bursaries, visit the Bursaries Portal.
