Other options should be explored before applying for a student loan

We are well into 2022 and in preparation for the academic year ahead, students are likely ironing out their financial needs for the next year.

Many students opt for student loans as a way to pay for their studies but these may not be tenable for everybody.

That having been said, FNB has said that the period between December and March over the last two years has seen an increase in demand for student loans. Unfortunately the bank doesn’t share how large that increase is, but it has also told students it may be better to explore other options.

“It’s important to understand all options that could be used to fund studies and explore whether these options are viable before applying for credit. For example, does the student qualify for National Student Financial Aid Scheme (NSFAS) or a bursary or is there a sponsor who would be willing to fund the student’s education? Alternatively, are there any savings available that could be used to fund the student’s education?,” noted head of business solutions at FNB Retail Loans, Amika Maharaj.

We also advise searching for bursaries being offered by companies and other organisations. While most bursary programs have likely closed at this stage, they’re worth remembering for the future.

Should a student loan be the last or only option, the average loan granted per year per student at FNB is R100 000. These funds can then be used for tuition, textbooks and other study-related expenses.

FNB also advises that students and the principal debtor to pay extra money to the loan where possible. While usually early payments come with some sort of penalty, FNB says that it doesn’t charge penalty fees for settling the loan early.

“Also remember that if additional funding is required for the next year of study, a new application needs to be submitted so only borrow the amount that you need and keep expenses low together with a healthy credit profile to ensure that future funding that can be attained,” concluded Maharaj.

[Image – CC 0 Pixabay]


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