Having the opportunity to further one’s education is a goal of many people in South Africa. The high costs of education however often mean that people have to apply for loans. While you can apply for a loan from your bank, if you have a bad credit record, you won’t qualify. Your next worthwhile option might be to apply for a private loan.
It’s generally difficult to find private loans for school with bad credit. Your best option would probably be to get a co-signer, or someone to act as surety. This person should have good credit, in order to offset your bad credit rating.
Some private lender may be willing to loan students with bad credit, only if they have a co-signer with strong credit.
Some lenders provide student loans without taking your credit history into account. If you do however have bad credit you may be charged higher interest. You won’t have the privilege of paying lower terms. It’s important to assess your options, so use an online loan calculator to work out how much you’ll be paying overall.
Make sure that you will be able to afford to repay the loan comfortably.
It’s important to note that bad credit isn’t only limited to individuals who have ruined their credit. Having no credit at all can also be considered “bad credit”.
A recent survey by debt management firm Debt Rescue revealed that there has been a spike in applicants who want to go under debt review who are under the age of 25. Further research indicates that consumers owe as much as 75% of their monthly pay to creditors, while 58.83% of consumers are battling to pay their credit card debt off. This paints a bleak picture about South Africans and their debt management skills, which means it’s more than likely that more people will have bad credit.
You can get student loans from private lenders such as the big four banks and other independent credit providers.
Tips:
- Make sure that you don’t default on payments
- Read the fine print before signing any agreements. Lenders often provide a co-signer release clause in the loan, which comes into effect after 48 consecutive timeous loan payments. After that, the payments you make enhance your credit record.
