Compare the best loans of South Africa and find the lowest rate
Are you a college student? Are you straggling to pay off your education? If you need to apply for a student loan, mind this article as I’ll explain all you need to know. I’ll refer to student’s loans with Absa Bank and Standard Bank for you to judge and choose which one fits your needs best. I’ll tell you all about their quotes and application and I’ll also name the requirements.
As we all know, education is the key that opens the door to anyone’s future. That’s why people try their best to have access to good education standards not only for themselves but also for their children. It frequently occurs that people who are interested in this kind of financial alternative rarely know how a student loan functions. Maybe that is so because, although there are many companies that provide students with loans, few of them take their time to further elaborate key information about them. In case you want to contact any financial entity and check if there is any loan option that can be of your interest, relax and ask as many questions as you want because they will guide you and support on whatever you may need.
If you want to read and learn a little bit about student loans, the content of this article will definitely help you understand the main tenets of it.
What does a student loan mean?
A student loan is a loan type that is thought to cover expenses that arise from those who have already finished school and at present need money to have access to post-secondary education. The funds obtained through this loan can be used to pay for expenses that are associated with the costs of pursuing a career, such as, fees, books, to mention just a few.
What are the three main types of student loans?
There exist three main student loan options from which you can benefit from:
Stafford Loans: Maybe you have heard about this option. The reason for that is that they are the most common loans requested by students. Although people, in general, have access to Stafford loans, there are some requirements that clients need to fulfill if they want to apply for this loan. The first and most important condition is that you have to be an American person who resides in the US. Additionally, debts are not permitted especially if you owe money to the federal government. Within this classification, there are two more alternatives available: subsidized and unsubsidized loans. The main difference between these two is that in the former, the state deals with the charges generated from the interest rates while you are studying. In relation to the latter, the one who is in charge of paying for these interests is it you. Stafford loans also offer flexible repayment options.
PLUS Loans: If you are a parent and you think it’s better that you take out a loan instead of your children, then plus loans are designed for those situations. It is important that you know that plus loans are intended to help you cope with your kid’s college education only. The features of this loan include interest rates that are low and also fixed. At the same time, whenever the applicant joins a program, you have the chance to reduce the interest rate.
Perkins Loans: This loan is not that different from a Stafford loan, but on this occasion, Perkins loans are not issued by the government. On the other hand, Perkins loans are issued by the educational institution where you are currently studying. Not all colleges offer this financial option, there are only 1800 of them that actually have this program available. Another difference between Perkins loans and Stafford loans is that not everyone can apply to it. This is so because only those that are in a financial hurry are the ones that are considered to be appropriate applicants to be granted this loan. In order to determine the loan approval, the government who is in charge of providing you with the funds or not will look into your income, together with your parents’ salary.
Who can qualify for a student loan?
In this case, according to the information presented above, anyone can apply for a student loan, that is, a college student or maybe the parents of a college pupil. Based on that data, we can say that before applying it would be useful to determine if you are an independent student or a dependent one. Generally, student loans are granted to those people that are undergoing financial needs and are not able to cope with some expenses on their own.
Can you take out a student loan for living expenses (for example: pay for rent or a car)?
Yes! You can definitely to use the money to cover living expenses. Taking out a student loan doesn’t mean that you have to use the money only for books and fees. The idea is that if you need money to take care of other needs, such as paying for the rent of your house or just buying some food to eat, you can count on the loan funds to cover those expenses. It is essential that you use the money only for satisfying the basic needs that arise from pursuing a career but not, for example, to go out with some friends.
What is the grace period on student loans?
The grace period for a student loan is generally around six months when the student graduates. This can be considered to be something good because it offers you the possibility of having some time to earn money and organize yourself when the time to pay for the loan comes. You should check beforehand if there will be any interest rates charged during the grace period on your loan or not. It may happen that when the student loan is in the grace period, it can accrue interest, but that is not always the case.
How long do you have to pay off a student loan?
Generally, this will depend on the repayment periods that are set by each company. The good side is that normally; you start paying your loan some days after you received your money. So that you can have an idea of the repayment terms, you can more less estimate that the periods range from 10 to 25 years. Please note that this is not always the case since everything will be determined not only by the financial institution but also by the type of student loan you ask for.
So far, I have delved into some commonly unknown loan details that I’m sure you were not aware of. So that you be better informed, herein you will also find that there are various financial entities from which you can get the money you need.
If you need help financing your years of studies, you’ll find here two entities willing to help you accomplish your goals. I’ll start with Absa Bank and then, I’ll go on expanding on Standard Bank. Both of them offer loans to students and are two of the most well-known companies in South Africa.
Absa Study Loan Application
Let’s begin by stating who can apply for a Study Loan from Absa, so you’ll be sure from the start how to enter the process. To start with, you have to be from South Africa or live in this country permanently and your monthly income has to be of at least R 3,000. Absa requires the student to be based in South Africa, and they can take the loan in the name of a parent, a sponsor or guardian or, a part-time student who works full-time. Bear in mind all of them should present a proof of income.
You can apply for the student loan through an Absa branch near your house, through a phone call- 0860 100 372 or, through student bureau.
Study Loans Quotes
Students can ask for a minimum of R 15,000, and they have two options to repay the loan. One option is to make capital and interest repayment as soon as they are approved for the study loan, and the other one is to repay interest just for a period of 1 year. From that year on, repayment installments will include capital and interest.
Now, I’ll list some important requirements you should pay attention to in order to apply for a student loan. You must:
- own a valid S.A. Identity Document or Smart Card,
- submit a proof of residence and 3 monthly pay slips or bank statements,
- prove that the student or the sponsor has a minimum monthly salary of R 3,000,
- accept to be under affordability checks and risk profile - for the student or sponsor,
- make sure that the person who takes out the study loan can submit a proof of income,
- present a final letter of acceptance as proof of study or a proof of registration from SETA or SAQA approved institution,
- present a proof of the cost for the year of study for tuition fees, accommodation for full-time students that don’t live with their parents, textbooks and technological devises used for studying and,
- submit a proof of the preceding years’ academic results to show you’re allowed to continue with the course of study. This item, of course, is for those students who are in the second or subsequent years of study.
Bear in mind you’ll need to re-apply every year of study you undertake and, that you may also add to the loan prescribed textbooks, tuition fees, accommodation and computer equipment you’ll need to study.
An important piece of information is that this loan will be granted based on the client’s risk and credit ratings.
Once you gathered all the requirements and the proper documentation, get in contact with Absa and start planning your future!
Absa Important Information
Minimum of R 15,000
Paid only while you’re a full-time student
0860 100 372
Armstrong Street, La Lucia, Durban.
Valid SA I.D., payslips, proof of income
Now, let’s talk about Standard Bank Student Loan: How to apply?
To start, you have to complete the online application. Almost immediately after you have completed and sent the application, Standard Bank will send you the outcome. Then, when they tell you that your loan has been provisionally approved, you’ll be asked to take specific documents to any of their branches. These documents will mainly depend on the type of student you are – part-time or full-time.
Keep in mind that providing you are a full-time student, a part-time student with a monthly salary minor to R 5,000 or you’re less than 18 years old you need to have a person to sign as a surety, if you want to apply for a Standard Bank Student Loan. This person should be seen as an acceptable surety for the bank.
What do I need to apply?
If you decide to apply for a Student Loan with Standard Bank, you have to register at an accredited tertiary institution. Also, you need to be studying to get a certificate, a diploma, a degree or a postgraduate degree or diploma.
Keep in mind you’ll be requested to submit academic results proving you’ve passed your previous year of study. As Standard Bank can’t finance outstanding fees owned to your academic institution, you ought to apply for the Student loan before starting the course.
Regarding the minimum income required, the amount asked varies depending on the type of study you undertake. For instance, if you go for a Degree or a Diploma, your surety should earn R 3,000 or more per month. For other courses, the surety’s minimum monthly income asked is R 5,000. Finally, if you’re a part-time student and you earn at least R 5,000 you won’t be required a surety.
Now you were provided with the information you need, you’ll be able to make a smart decision about your student loan. So, contact the bank you think is best for you and start this new chapter in your life.