Student Loans in South Africa- Pros and Cons
Getting access to student loans in South Africa has become much easier. A number of financial institutions offer competitive student loans to qualifying individuals all over the country.
Students are also no longer limited to applying for this type of finance from banking institutions only. There are a range of micro lending institutions that offer this service too, along with government-backed institutions.
What are the Pros of Student Loans in South Africa?
Once you are approved, you get access to the education you need, without having to worry about how your fees will be paid. You can then prioritise your education.
Interest rates are lower than those on personal loans. One of the main advantages of choosing student loans in South Africa versus getting a personal loan is that these loans come with lower interest rates and more favourable terms.
Student loans may be easier to obtain. Unlike personal loans, which may require you to have a pristine credit record, student loans may give you an option to have someone to act as surety on your behalf. This may make it easier to access the loan.
Interest rates are often fixed. This makes it easier to budget because you (or your guarantor) have a consistent repayment every month. Fluctuations in the prime interest rate won’t affect your repayments.
You get to pay the interest portion only while studying. Some lenders may grant you a grace period after you’ve completed your studies to complete internships or articles. Following this, only then do you become liable to pay off the principal portion of the student loan.
What are the Cons?
If you have poor credit, you’ll need to get someone to act as surety.
You may end up in too much debt because of borrowing more than you need.
If you do decide to apply for Student Loans in South Africa, make sure that you compare different lenders and that you choose a loan option that suits your needs.
To see some options for student loans, click here.