- WHAT IS A STUDENT LOAN?
- HOW DO STUDENT LOANS WORK IN SOUTH AFRICA?
- WHO CAN APPLY FOR A STUDENT LOAN?
- WHAT ARE THE REQUIREMENTS FOR A STUDENT LOAN?
- WHAT CAN A STUDENT LOAN PAY FOR?
- HOW MUCH DOES A STUDENT LOAN COST?
- WHAT IS THE INTEREST RATE ON A STUDENT LOAN?
- WHEN DO YOU HAVE TO REPAY A STUDENT LOAN?
- WHAT DOCUMENTS DO I NEED TO APPLY FOR A STUDENT LOAN?
- HOW TO APPLY FOR A STUDENT LOAN
- WHAT IS THE NSFAS STUDENT LOAN?
- WHAT BANKS OFFER STUDENT LOANS?
- STUDENT LOAN VS BURSARY
- STUDENT LOAN VS NSFAS
- CAN I GET A STUDENT LOAN WITHOUT A BURSARY?
- WHAT HAPPENS IF I CANNOT REPAY MY STUDENT LOAN?
A student loan can help pay for higher education when you do not have enough money to cover your study costs. Unlike a bursary, a student loan is borrowed money that must normally be repaid according to the terms of the loan.
Student loans in South Africa are available through different funding providers, including the National Student Financial Aid Scheme (NSFAS) and commercial banks. The eligibility requirements, interest charges, repayment arrangements and costs covered depend on the particular loan.
WHAT IS A STUDENT LOAN?
A student loan is a form of credit used to finance education-related expenses. The money must be repaid, usually with interest and applicable fees, according to the lender’s terms.
Depending on the lender, a student loan may help cover expenses such as tuition, registration, accommodation, textbooks, study equipment and other approved education costs.
The person taking responsibility for the loan can vary. Some student loans require a parent, guardian or other person to act as a guarantor or surety, while some products may allow students to qualify without a surety if they meet the provider’s requirements.
HOW DO STUDENT LOANS WORK IN SOUTH AFRICA?
The basic process is to apply for an amount needed for approved study expenses, undergo the lender’s eligibility and affordability assessment, and receive funding if the application is approved.
The lender may pay certain costs directly to the university, college, accommodation provider or another relevant party rather than paying the entire loan amount into the student’s personal account.
The borrower then repays the loan according to the agreement. The timing of repayments differs between products. Some arrangements require payments while the student is studying, while others provide a period before the student takes over repayments.
For example, Standard Bank’s current student-loan information distinguishes between different products and repayment arrangements, including loans that require a surety and a separate offering without a surety.
WHO CAN APPLY FOR A STUDENT LOAN?
There is no single eligibility requirement for every student loan in South Africa. Each lender sets its own criteria.
Depending on the loan, eligibility may depend on factors such as:
- Citizenship or residency.
- Whether you are studying full-time or part-time.
- The university, college or other institution you attend.
- The qualification or course you are studying.
- Your academic results or progression.
- Household or personal income.
- Affordability and credit assessment.
- Whether a parent, guardian or guarantor is available where required.
For example, Absa states that its study loan can be used for full-time or part-time study at qualifying institutions and that approval is subject to risk and affordability assessment.
WHAT ARE THE REQUIREMENTS FOR A STUDENT LOAN?
Student loan requirements depend on the lender and the specific loan product. Common requirements can include:
- A valid South African identity document or other accepted identification.
- Proof of registration or an official acceptance letter from the institution.
- Proof of tuition and other study costs.
- Recent academic results.
- Proof of income where required.
- Bank statements or other financial information.
- Proof of residence.
- Details and supporting documents for a guarantor or surety where required.
Meeting the basic requirements does not automatically mean that a loan will be approved. Lenders can also assess affordability, risk and other eligibility criteria.
WHAT CAN A STUDENT LOAN PAY FOR?
The costs covered depend on the lender and loan agreement. Student loans can potentially cover:
- Registration fees.
- Tuition fees.
- Student accommodation.
- Textbooks.
- Study equipment.
- Laptops, tablets or other approved technology.
Some lenders impose limits on particular expenses. Standard Bank, for example, states that its student-loan products can cover tuition, accommodation, textbooks and equipment, with specific limits applying to some categories.
Do not assume that a student loan will cover every cost associated with studying. Check the specific product’s terms before applying.
HOW MUCH DOES A STUDENT LOAN COST?
The cost of a student loan depends on the amount borrowed, interest rate, fees, repayment period and other terms of the loan.
The total amount repaid can therefore be higher than the amount originally borrowed.
Before accepting a loan, check the lender’s current quotation and terms for the total cost of credit, interest, fees, repayment period and any other charges that apply.
WHAT IS THE INTEREST RATE ON A STUDENT LOAN?
There is no single student-loan interest rate that applies to every lender in South Africa.
The interest rate can depend on the lender, loan product, applicant and affordability or risk assessment. Some lenders advertise their student loans at rates linked to the prime lending rate or provide an individual rate when an application is assessed.
For example, Absa currently advertises its student loan at a rate linked to prime, while its approval remains subject to affordability and risk assessment.
Always check the current rate and full cost of credit before signing a student-loan agreement.
WHEN DO YOU HAVE TO REPAY A STUDENT LOAN?
Repayment arrangements vary between student loans.
Some loans require the borrower or guarantor to service interest and fees while the student is studying. Other products can provide a period before the student begins making the required repayments.
For example, Standard Bank’s conventional student-loan terms can require a guarantor or surety to service interest and fees while the student studies, while its separate no-surety product states that repayment begins after the student completes their studies or secures employment, subject to its terms.
Because repayment terms differ substantially, students and their families should understand who is responsible for repayments and when repayments begin before accepting a loan.
WHAT DOCUMENTS DO I NEED TO APPLY FOR A STUDENT LOAN?
The exact documents depend on the lender, but an application can require:
- South African ID or other accepted identification.
- Proof of residence.
- Proof of registration or an acceptance letter.
- Latest academic results.
- Tuition fee statements or quotations.
- Accommodation costs where applicable.
- Textbook or equipment costs where applicable.
- Recent payslips or bank statements where income verification is required.
- Identification and income documents for a guarantor or surety where applicable.
Standard Bank and Absa both list academic, registration and cost-related documentation among the information required for their current student-loan applications.
HOW TO APPLY FOR A STUDENT LOAN
The application process depends on the lender, but students can generally follow these steps:
- Confirm your study costs. Obtain the latest information about tuition, registration, accommodation, textbooks and other approved expenses.
- Check the lender’s requirements. Make sure you meet the citizenship, study, income, affordability and other requirements.
- Check whether a guarantor or surety is required. If one is needed, make sure the person meets the lender’s requirements.
- Prepare your documents. Have your academic, registration, identification and financial documents ready.
- Apply through the lender. Use the lender’s official website, branch or other approved application channel.
- Review the quotation. Check the interest rate, fees, repayment period, total cost and amount you will be responsible for repaying.
- Complete the agreement. If approved, read the loan agreement carefully before accepting it.
For detailed application instructions, Grads24 can provide separate guides for specific student-loan providers as these products and requirements change.
WHAT IS THE NSFAS STUDENT LOAN?
The NSFAS Student Loan is a separate form of financial support from the NSFAS bursary. It is intended for students who meet the applicable loan criteria and must be repaid according to the loan terms.
NSFAS currently states that its loan programme covers applicants in different income categories from the bursary scheme. For non-SASSA applicants, undergraduate loan eligibility is currently described as household income between R350,000 and R600,000 per year, while postgraduate loan eligibility can extend to households earning up to R600,000 per year, subject to the applicable requirements.
The NSFAS loan is therefore not simply another name for the NSFAS bursary. Students should check the current NSFAS requirements for the academic year in which they are applying.
For the latest NSFAS applications, requirements, funding information and application process, visit our NSFAS guide.
WHAT BANKS OFFER STUDENT LOANS?
Several South African banks offer education or student-loan products. The available products and eligibility requirements can change, so students should check the lender’s current terms before applying.
- Standard Bank: offers student-loan products covering eligible education costs, with different arrangements depending on the product and whether a surety is required.
- Absa: offers a study loan for qualifying students and education costs, subject to its eligibility, affordability and risk requirements.
- Nedbank: offers student-loan financing and provides application requirements covering academic results, registration, study costs and guarantor information where applicable.
This is not a complete list of every student-loan provider in South Africa. It is better to compare the current terms of available products rather than choosing a lender based only on the advertised loan amount.
STUDENT LOAN VS BURSARY
A bursary and a student loan both provide financial support for education, but they work differently.
| Bursary | Student Loan |
|---|---|
| Financial support that generally does not have to be repaid if the applicable conditions are met. | Borrowed money that must be repaid according to the loan agreement. |
| Usually awarded according to eligibility criteria set by the funder. | Subject to the lender’s eligibility, affordability and credit requirements. |
| May cover specified study costs. | May cover specified study costs, depending on the loan product. |
| May have academic, financial, field-of-study or other conditions. | Has repayment, interest and fee obligations. |
We explain this distinction in more detail in our guides to how a bursary differs from a student loan and bursary vs loan.
STUDENT LOAN VS NSFAS
NSFAS can provide both bursary funding and student loans, so it is important to distinguish between the two. A conventional bank student loan is also different from both NSFAS funding arrangements.
| NSFAS Bursary | NSFAS Student Loan | Commercial Student Loan |
|---|---|---|
| Does not generally require repayment if applicable conditions are met. | Must be repaid according to the NSFAS loan terms. | Must be repaid according to the lender’s terms. |
| Available to qualifying students under the NSFAS bursary criteria. | Available to qualifying students under the NSFAS loan criteria. | Eligibility varies by lender. |
| Available at qualifying public universities and TVET colleges. | Available according to the NSFAS loan programme requirements. | Institution and qualification requirements vary by lender. |
| Financial eligibility is assessed under the bursary rules. | Financial eligibility is assessed under the loan rules. | Affordability and credit requirements can apply. |
NSFAS currently publishes separate eligibility thresholds for its bursary and loan programmes.
CAN I GET A STUDENT LOAN WITHOUT A BURSARY?
Yes. A student loan and a bursary are separate forms of education funding. You do not generally need to have received a bursary before applying for a student loan.
Whether you qualify for a loan depends on the requirements of the particular provider. Some loans require a guarantor or surety, while others have different arrangements for applicants who qualify without one.
For example, Standard Bank has a separate student-loan product that does not require a surety for eligible students studying at participating institutions, although its current offering has specific eligibility and course requirements.
WHAT HAPPENS IF I CANNOT REPAY MY STUDENT LOAN?
If you are unable to make repayments, contact the lender as soon as possible rather than ignoring the account.
The consequences of missed payments depend on the loan agreement and may include additional charges, collection activity and negative effects on your credit record.
If a guarantor or surety is part of the agreement, that person may also have responsibilities under the loan contract.
Before taking a student loan, make sure you understand the repayment obligation, including what happens if you stop studying, fail to complete your qualification or cannot find employment after graduation.
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