Understanding Student Loans
What is a Student Loan?
A student loan is a type of loan designed to help students cover the costs of higher education. Unlike bursaries, student loans must be repaid with interest once you have completed your studies and are earning a salary.
Types of Student Loans
Government Loans (NSFAS): The National Student Financial Aid Scheme (NSFAS) offers competitive interest rates, typically set at 80% of the repo rate, for students attending public universities.
Bank Student Loans: Banks like Absa, Standard Bank, and FNB offer student loans that require a guarantor, often a parent or guardian. These loans cover a wide range of university-related expenses.
Independent Credit Providers: Specialized entities like RCS, Just Money, and FUNDI offer tailored student loans with unique advantages and terms.
Eligibility and Application Process
Eligibility Criteria
Citizenship: You must be a South African citizen or a permanent resident.
Income: For part-time students, a minimum income of R5,000 per month is often required. For full-time students, a guarantor with a minimum income of R3,000 per month is needed.
Institution: You must be accepted or currently studying at an accredited institution.
Application Process
Gather Documents:
Identity documents
Proof of residence
Proof of income (payslips or bank statements)
Proof of study costs (tuition fees, accommodation, etc.)
Proof of registration or acceptance letter.
Apply Online or In-Person:
Many banks allow online applications, while others require you to visit a branch.
Instant Quotes:
Some banks offer instant quotes to help you determine if you qualify.
Managing Your Student Loan
Repayment Options
Interest-Only Repayment: Many banks offer an interest-only repayment period, typically for 12 months, allowing you to focus on your studies without immediate capital repayment.
Full Repayment: After the interest-only period, you will need to repay both interest and capital.
Budgeting and Financial Planning
Assess Your Finances:
Calculate your income and expenses to ensure you can afford loan repayments.
Create a Budget:
Allocate funds for loan repayments, living expenses, and savings.
Debt Management:
Prioritize debt repayment and consider paying more than the minimum required.
Overcoming Challenges
Financial Stress
Seek Advice:
Consult with financial advisors or bank representatives to understand your loan terms and options.
Credit Protection Plans:
Consider credit insurance to protect against unforeseen circumstances like job loss or illness.
Repayment Difficulties
Communicate with Your Lender:
Inform your bank if you are struggling to make repayments. Your bank manager may offer temporary relief or a restructuring option.
Prioritize Payments:
Ensure essential expenses are covered before making loan payments.
Navigating student loans in South Africa requires careful planning and understanding of the available options. By choosing the right loan, managing your finances effectively, and seeking help when needed, you can successfully fund your education and set yourself up for a secure financial future.
Questions after the interview:
At the end of an interview there is usually an opportunity where you can ask any questions you might have. This is a great opportunity to show the interviewer that you are interested in the position as well as the company. It is a good idea to prepare a few questions before the interview – this can be done while you are doing research on the company.
Your questions should show the interviewer that you are a good candidate for the position. Try and avoid questions that are based on your personal needs and preferences, for instance:
- How much leave will I get in a year?
- Will I be considered for promotion in my first year?
- When will I get an increase?
- What time can I leave in the afternoon?
These questions are inappropriate at this stage and will probably raise concerns on the side of the interviewer. Should you be the successful candidate then all these questions will be answered in your letter of appointment so don’t waste this opportunity by asking these basic questions.
If the position is an entry level job or very junior then you are welcome to ask questions in line with the position, for instance:
- Why did the previous person leave the position?
- What would the successful person be tasked to do in a typical day?
- How does this position fit into the department and / or company?
- Could you explain the company structure to me?
- Is there any further education assistance or support?
If the position is more senior then you can prepare question around the following themes:
- current issues that will face the successful candidate;
- inter-personal challenges in the department;
- any process, technology or people challenges that needs to be attended to urgently;
- key result areas that need urgent attention in the first few months;
The above information should get you started. Prepare a few questions so that you can show your worth. Good luck with your interview!
