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Student Loans In South Africa

WHAT IS A STUDENT LOAN?

A student loan is money borrowed to pay for higher education and related study costs. Unlike a bursary, a student loan must be repaid according to the terms of the loan agreement and will normally include interest and applicable fees.

Student loans in South Africa are available through commercial banks and other funding providers, including the National Student Financial Aid Scheme (NSFAS). The requirements, amount available, interest rate, costs covered and repayment arrangements depend on the particular loan.

HOW DO STUDENT LOANS WORK IN SOUTH AFRICA?

The basic process is to apply for funding for approved study expenses, undergo an eligibility and affordability assessment, and receive the loan if the application is approved.

The lender may pay tuition directly to the university or other education provider and may pay approved accommodation, textbook or equipment costs to the relevant party. The exact payment arrangement depends on the loan provider.

Once the loan has been granted, the borrower must repay the amount borrowed together with the applicable interest and fees according to the agreement. Some loans require payments while the student is studying, while others provide a period before the student becomes responsible for the repayments.

For example, Standard Bank’s current student-loan products have different repayment arrangements depending on the product, while Nedbank states that full-time students can have their guarantor pay monthly interest during their studies before the student starts repaying the loan amount. Part-time students are subject to different repayment arrangements.

WHO CAN APPLY FOR A STUDENT LOAN?

There is no single set of requirements for every student loan in South Africa. Each lender determines its own eligibility criteria.

  • South African citizenship or permanent residence may be required.
  • You may need to be accepted at or registered with an approved university, college or other institution.
  • The lender may restrict funding to particular qualifications or institutions.
  • Some loans are available to full-time and part-time students, while others have more specific study requirements.
  • The lender may assess your income, household income, affordability and credit profile.
  • A parent, guardian, sponsor or other person may need to act as a guarantor or surety.

For example, Absa states that its study loan can finance undergraduate and postgraduate qualifications and can be used for full-time or part-time study at qualifying institutions, subject to its eligibility, risk and affordability requirements.

WHAT ARE THE REQUIREMENTS FOR A STUDENT LOAN?

Student loan requirements vary between providers, but an application may require information about your identity, studies, costs and financial circumstances.

  • South African ID or another accepted identity document
  • Proof of residence
  • Proof of university or college registration
  • Acceptance letter if you have not yet registered
  • Latest academic results
  • Proof of tuition and registration costs
  • Proof of accommodation costs where applicable
  • Proof of textbook or equipment costs where applicable
  • Proof of income or bank statements where required
  • Income and identification documents for a guarantor or surety where applicable

For example, Standard Bank currently requests course-related documents such as proof of registration or acceptance, study costs and academic results, together with personal and surety documentation where applicable.

CAN PART-TIME STUDENTS GET A STUDENT LOAN?

Yes, some student loans are available to part-time students, but this depends on the lender and the particular loan product.

For example, Absa states that its study loan can be used for full-time or part-time study at qualifying institutions. Nedbank also offers student-loan financing for both full-time and part-time students, although the repayment arrangements differ between the two study modes.

Part-time students should therefore check whether the lender has additional income, employment or repayment requirements before applying.

CAN MATRIC STUDENTS APPLY FOR A STUDENT LOAN?

Matric students can apply for some student-loan products, but the lender may require proof of admission or registration before funding is released.

Standard Bank states that matriculants can begin the student-loan process, but the final National Senior Certificate results are required to complete the application. Its application process also requires proof of registration or an acceptance letter, depending on the stage of the application.

If you are still in matric, check the lender’s requirements before applying and confirm which documents can be submitted before your final results are available.

WHAT CAN A STUDENT LOAN PAY FOR?

A student loan can cover approved education expenses, but the costs covered depend on the lender and loan product.

  • Tuition fees
  • Registration fees
  • Accommodation
  • Textbooks
  • Laptops, tablets or other study equipment
  • Other approved education-related expenses

For example, Absa’s study loan can cover tuition, registration, accommodation for qualifying full-time students, textbooks and required computer equipment. Standard Bank also lists tuition, accommodation, textbooks and equipment among the costs that can be financed, subject to the product’s limits and requirements.

Do not assume that every student loan covers all of these expenses. Check the specific lender’s terms before calculating how much funding you need.

HOW MUCH CAN YOU GET FROM A STUDENT LOAN?

There is no single student-loan amount available to every student in South Africa. The amount you can borrow depends on the lender, loan product, approved study costs and affordability assessment.

Some lenders determine the amount according to the actual cost of tuition and other approved expenses, while the amount you qualify for can also depend on income and repayment affordability.

For example, Absa currently states that its study loan can be taken for each year of study and has a minimum loan amount of R15,000, while its current student banking information advertises study loans of up to R250,000 for qualifying study-related costs. The amount granted remains subject to the lender’s risk and affordability assessment.

Because loan limits and product terms can change, use the lender’s current quotation rather than relying on an old advertised amount.

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 will generally be higher than the amount originally borrowed because interest and applicable fees are charged according to the loan agreement.

Before accepting a student loan, check the quotation and agreement for the interest rate, monthly repayments, fees, repayment period and total cost of credit.

WHAT IS THE INTEREST RATE ON A STUDENT LOAN?

There is no single interest rate for all student loans in South Africa. The rate depends on the lender, loan product and the applicant’s circumstances.

Some lenders offer rates linked to the prime lending rate, while others may determine an individual rate following an affordability or risk assessment. Absa currently states that its study loan is available at a prime-linked rate for qualifying transactional account holders, while non-transactional account holders receive a personalised interest rate.

Always check the current interest rate and total cost of the loan before accepting an offer.

WHEN DO YOU HAVE TO REPAY A STUDENT LOAN?

The repayment date depends on the loan agreement. Some student loans require interest or other payments while the student is studying, while others allow repayment of the loan amount to begin after studies or after a specified period.

For example, Absa allows borrowers to choose between capital and interest repayments or interest-only repayments for a specified period. Nedbank states that, for full-time students, the guarantor pays monthly interest while the student is studying, with the student beginning to repay the loan amount after completing their studies.

Do not assume that repayment starts only after graduation. Check the repayment terms of the specific loan before accepting it.

WHAT DOCUMENTS DO YOU NEED TO APPLY FOR A STUDENT LOAN?

The exact documents depend on the lender, but a student-loan application may require:

  • South African ID or accepted identity document
  • Proof of residence
  • Proof of registration or acceptance
  • Latest academic results
  • Tuition fee statement or quotation
  • Accommodation quotation or lease agreement where applicable
  • Textbook and equipment quotations where applicable
  • Recent payslips or bank statements where income verification is required
  • Identification and income documents for a guarantor or surety where required

For example, Standard Bank currently requires proof of registration or acceptance, proof of study costs and academic results, together with identification, income and banking documents for the guarantor or surety where applicable.

HOW TO APPLY FOR A STUDENT LOAN?

The application process differs between lenders, but the following steps can help you prepare:

  1. Calculate your study costs. Get current information about tuition, registration, accommodation, textbooks and other expenses you want the loan to cover.
  2. Check the lender’s requirements. Confirm the citizenship, study, income, affordability and institution requirements.
  3. Check whether a surety is required. If the loan requires a guarantor or surety, confirm that the person meets the lender’s requirements.
  4. Prepare your documents. Gather your identification, academic, registration, cost and financial documents.
  5. Submit the application. Apply through the lender’s official website, branch or other approved application channel.
  6. Review the offer. Check the interest rate, fees, repayment period, monthly payment and total amount you will repay.
  7. Accept the agreement only after understanding the repayment obligation.

For example, Standard Bank allows applicants to start the process online and then complete the final stages at a branch, while Nedbank provides an application form that can be submitted for assessment.

CAN YOU GET A STUDENT LOAN WITHOUT YOUR PARENTS?

It is possible to apply for some student-loan products without having a parent act as the guarantor, but this depends on the lender and loan product.

A parent is not necessarily the only person who can provide financial support for a student loan. Depending on the lender, a guardian, sponsor or another qualifying person may be able to act as the guarantor or surety.

Some products may also be structured without a surety, subject to their specific eligibility criteria. Students should therefore distinguish between not having a parent available and not needing a surety because they are not the same requirement.

CAN YOU GET A STUDENT LOAN WITHOUT A SURETY?

Yes, some student-loan products can be offered without a surety, but they are not available to every student and may have additional eligibility requirements.

For example, Standard Bank has a student-loan product designed without a surety. Its current information states that eligible students do not need a surety or personal income, but the product is restricted to participating universities and approved courses, and household income and other eligibility requirements apply. Standard Bank currently also states that applications for its backed student loan without surety offering are closed, so applicants should check the latest status before applying.

Read our dedicated guide covering student loans without surety, including available options, requirements and application information.

CAN YOU GET A STUDENT LOAN IF YOU HAVE NO INCOME?

Not having your own income does not automatically mean that every student-loan option is unavailable, but many loan products require an income assessment from the borrower, guarantor, parent, guardian or sponsor.

Some products may allow students without personal income to qualify if other requirements are met. For example, Standard Bank’s current no-surety product states that the student does not need an income to qualify, although other eligibility requirements apply.

Students should therefore check the individual lender’s requirements rather than assuming that having no personal income automatically qualifies or disqualifies them.

WHAT IS THE NSFAS STUDENT LOAN?

The NSFAS Student Loan is a loan-based funding option administered by the National Student Financial Aid Scheme. It is different from the NSFAS bursary because the loan must be repaid according to the applicable loan agreement.

NSFAS currently states that loan eligibility is based on different household-income ranges from the NSFAS bursary. For non-SASSA applicants, the current published loan range for undergraduate study is household income between R350,000 and R600,000 per year. For postgraduate university study, the published threshold is R600,000 or less per year. Other eligibility requirements also apply.

NSFAS also states that its loan agreement can cover approved registration and tuition fees, learning material and accommodation where applicable, while the living, personal-care and transport allowances available under the bursary are not included in the standard loan funding.

Students should check the latest NSFAS information before applying because eligibility thresholds, application periods and funding rules can change.

WHAT BANKS OFFER STUDENT LOANS?

Several South African banks offer study or student-loan products. The products and requirements can change, so students should check the lender’s current terms before applying.

  • Standard Bank – offers student-loan products for approved education costs, including tuition, accommodation, textbooks and equipment, with different arrangements depending on the product.
  • Absa – offers a study loan for qualifying undergraduate and postgraduate study and can finance tuition, accommodation, textbooks and required study equipment.
  • Nedbank – offers student loans for full-time and part-time study, with repayment arrangements that differ according to the study mode.

These are examples of established student-loan providers and are not a complete list of every education-finance option available in South Africa.

WHAT IS THE DIFFERENCE BETWEEN A STUDENT LOAN AND A BURSARY?

The main difference is repayment. A student loan is borrowed money that must be repaid, while a bursary generally provides financial support that does not have to be repaid if the recipient meets the applicable conditions.

Student LoanBursary
Must be repaid according to the loan agreement.Generally does not have to be repaid if the applicable conditions are met.
Interest and applicable fees can apply.Does not normally operate as a credit agreement.
Affordability and credit requirements can apply.Eligibility is determined by the bursary provider.
May require a guarantor or surety.May have academic, financial, field-of-study or other requirements.

WHAT IS THE DIFFERENCE BETWEEN A STUDENT LOAN AND NSFAS?

NSFAS is a funding scheme rather than a single type of funding. It currently provides both bursary and loan funding to qualifying students.

NSFAS BursaryNSFAS Student LoanCommercial Student Loan
Generally does not require repayment if applicable conditions are met.Must be repaid according to the NSFAS loan agreement.Must be repaid according to the lender’s agreement.
Subject to NSFAS bursary eligibility.Subject to NSFAS loan eligibility.Eligibility varies between lenders.
Available at qualifying public universities and TVET colleges.Available according to 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 may apply.

NSFAS publishes separate eligibility and funding rules for its bursary and loan programmes.

WHAT HAPPENS IF YOU CANNOT REPAY A STUDENT LOAN?

If you cannot make your required student-loan repayment, you should contact the lender as soon as possible rather than simply stopping payments.

The consequences of missed repayments depend on the loan agreement and may include additional charges, collection activity and negative effects on your credit record. Where a guarantor or surety is involved, that person may also have obligations under the agreement.

Before taking a student loan, make sure you understand who is responsible for repayment, when repayments begin, how interest is calculated and what happens if payments are missed.

STUDENT LOAN APPLICATION CHECKLIST

  • Confirm the institution and qualification you will study.
  • Calculate the amount required for tuition and other approved costs.
  • Check whether the lender requires a surety or guarantor.
  • Check the income and affordability requirements.
  • Prepare your ID, proof of residence and academic documents.
  • Obtain registration, acceptance and study-cost documents.
  • Compare the interest rate and total repayment cost.
  • Understand when repayments begin.
  • Apply through the lender’s official application channel.
  • Read the loan agreement before accepting the funding.

Student-loan terms can change, so always verify the latest requirements, interest rates, loan limits and application procedures with the relevant provider before submitting an application.

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