What is a student loan?
A student loan refers to money that is borrowed from the government or lender to pay for your college tuition fees. The money that has been borrowed has to be paid back with interest over a period of time.
How does a student loan work?
Students along with their parents or legal guardians need to enquire information from the Free Application for Federal Student Aid (FAFSA) and receive forms before applying for the loan. Once the financial information is completed, the form is sent to the institution of the students choice. The institution then decides the amount of aid the student qualifies for and sends them a letter with their financial aid offerings. Once the letter has been received, the student can then apply for a student loan.
How to apply for a student loan
Choose your loan provider:
There are many financial institutions (banks) that offer student loans. Depending on the financial institution chosen, each one has a different interest rate. One needs to bear in mind that these are the fees that a bank charges you to borrow money from them. It is important that you do a thorough research before making your final decision.
Suretyship refers to a person who takes responsibility for another individual that undertakes an obligation to pay a sum of money. When taking out a student loan, be sure that you have someone that can stand surety for you. This individual has the responsibility to ensure that your student loan is repaid if you are unable to pay it. If you do not have someone that can stand surety for you, NSFAS (National Student Financial Aid Scheme) offers loans to students that have no surety.
Ensure that you qualify:
Financial institutions have strict requirements that you need in order to apply for a loan. If all of your documents are in order, you should know the very same day or within a week if your loan has been approved or denied.
You will need the following documentation:
- SA Identification
- Proof of home address
- Proof of registration from an educational institution
- Latest payslip of the person standing surety
- Three months bank statements
- Proof of university costs
So there you have it, three easy steps to apply for a student loan. If you are not 100% sure about the process, call around and enquire for more information or do a thorough research before applying for a student loan.