While attending college or University could be your key to a better job, there is no escaping the fact that higher education in South Africa can be pretty expensive! For many students they have to turn to getting a variety of loans and grants in order to pay for their education.
Student Loans in South Africa
Let’s start by summarizing what student loans are and how they can differ from other loan types. In short, it’s exactly like any other bank loan. It is money lent to you that you are expected to pay back in agreed repayments over a set period of time. Like any other loan, a student loan impacts your credit score. The main difference is that the money does not have to be repaid immediately, you will not be expected to start making repayments until you have finished school. Depending on how long your course of study is, and the costs associated with it, you may find yourself having to apply for more than one student loan. You may also have other borrowings like a credit card or overdraft. It can be more manageable to combine all of these debts into a single repayment which is why so many students are interested in how to consolidate your loan.
We recommend going with a reputable South African bank such as Absa or Nedbank for your loan.
Consolidating Your Student Loan
It doesn’t matter what you end up studying at college, one thing is certain – it is probably going to put you in a significant amount of debt! That’s why a growing number of graduates are learning how to consolidate student loans, making repaying them much more manageable as they embark on the next stage of their lives. We recommend checking out options for debt consolidation if you’re in this position.
What You Need to Know
If you are struggling to pay back your student loan then you need to check out the different consolidation options that are available. Different lenders offer an assortment of repayment plans for borrowers. Compare the different types of loans that are available so as to get the one that works best for your situation. There are both secured and unsecured loan options. The key difference with these is that one requires some form of collateral while the other does not.
You’ll need to verify that you have the income necessary to cover all of your monthly expenses. If after covering your monthly expenses, you have additional income available this will help with your approval. You also need to check on your credit rating to see if you have good or bad credit. Typically, people with bad credit will have a more difficult time getting a loan but lenders will still offer you the money you need.
For most students, one of the biggest advantages is going to be securing a lower interest rate. If you can reduce the interest rate even slightly, it means that in the long run the total amount you have to pay back is going to be lower.
Another major consideration is that when you consolidate multiple debts you will usually be able to reduce the total monthly payment making it much more affordable. That’s great news for students who have just recently graduated and are now trying to find their feet in ‘the real world’.
You may be able to release your co-signer (likely your parents) from their agreement as you would be taking on the loan solely in your own name. If you have graduated and are carrying some student debt, then it is well worth taking a closer look at how to consolidate student loans to see if you can secure a more manageable or more affordable repayment.