5 Things To Know About Student Loans

  • A student loan is money that a bank pays for tuition fees, student accommodation, and other expenses.
  • You need a surety to pay the interest every month during your studies.
  • You are responsible for repaying the rest of the loan after your studies.
  • There are numerous documents you need to gather before going to the bank. These include: 
    • Proof of tuition fees and books.
    • Proof of accommodation costs.
    • Letter of acceptance.
    • Latest academic results.
    • Identification documents.
    • Proof of residence.
    • 3 months proof of salary (surety). 
    • 3 months bank statements (surety).
  • Banks have different interest rates and benefits.
  • If your guardians do not qualify, there are alternative paths to follow, such as bursaries.
  • Make sure to think about the pros and cons before jumping into a student loan.

It can be extremely hard to find the money for tertiary education. Do not let that stop you from investing in your future. There are plenty of funding options available, such as student loans. 

Make sure that you have all the information about student loans before you take action.

Here are 5 things you should know:

  1. How do student loans work? 
  2. Gather all the documents.
  3. Go to different banks.
  4. Plan to pay the loan off.
  5. Pros and cons.

1. How Do Student Loans Work?

A student loan is paid out to students to pay for tuition fees, accommodation, books, and other necessities. 

A person must be approved by the bank to qualify for this type of loan. Since students do not usually have an income yet, they might need to ask their guardians to guarantee the loan. 

After you and your guardians have been approved, the process of repayment works as follows:

Interest While Studying

After the full amount of the loan has been paid out into your student account, your guardian will have to pay a certain amount of money each month. This amount is usually the interest. 

Repayment After Studies

Once your studies are completed, the interest payments should be paid off. Thereafter, the student has to make a monthly payment to repay the rest of the loan. 

2. Gather All The Documents

It is important to look for job opportunities in the last year of your studies so that you will be able to pay the monthly instalments.

Before you go to the bank you should gather all the necessary documents for your application. 

Lines at the bank can take long and you do not want to get to the front just to hear that you are missing a form.

To help you remember everything, here is a list of the information you must take with:

Documents From Your Academic Institution

These documents can be requested from the institution.

  • Letter of acceptance.
  • Proof of tuition fees and books.
  • Proof of accommodation costs.
  • Latest academic results.

Personal Documents

The documents needed from the student and the surety (guardian) are:

  • Identification documents.
  • Proof of residence.

The documents needed from only the surety are:

  • Proof of salary (3 months).
  • Bank statements (3 months).

3. Go To Different Banks

It is advisable to visit different banks, as interest rates may vary. It may not seem like a lot but a small difference in interest rates can save you a lot of money over time. 

Compare the interest rates on student loans from a variety of banks and make sure that you get the lowest rates for the repayment. 

Another reason to approach many banks is that they all offer different benefits. 

student loans

4. Plan To Pay The Loan Off

If you are lucky enough to have a guardian who can be your surety, you do not have to worry about the monthly payments while studying. 

If your guardians are not able to, there are still other options, such as:

Approach Individuals To Be Your Surety

If you know someone who will be able to help you, you could write them a letter. If you are willing to, you could try to find a part-time job to repay the surety each month.

Apply For Bursaries

Remember to submit your applications for bursaries as soon as possible. You should also make sure to research all the available funding options.

After your studying years, you are responsible for repaying the rest of the loan. Therefore, you need to get employed

Here are a few tips to help you find a job:

  • Perfect your CV.
  • Apply for internships.
  • Do community service.
  • Find part-time jobs during your studies.
  • Stack your skills.

4. Pros And Cons

Before you set your mind on a student loan you should consider the advantages and disadvantages.

Student Loan Pros

Student loans have many benefits, such as:

  • No waiting for bursary approvals.
  • Academic requirements are low.
  • You become independent.
  • Some of the money is paid into your account.

Student Loan Cons

There are a few disadvantages as well, including:

  • Debt to pay each month.
  • Interest rates mean you pay more than you receive.
  • It can take a long time to repay.
  • Risky if you do not get a job after your studies.

Affordable institutions

Distance learning institutions offer affordable learning. Here is a list of distance learning institutions:

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