Start with money you do not have to repay
Before you borrow for studies, check whether the student qualifies for funding that is not a loan. NSFAS funds students at public universities and TVET colleges from households with a combined income of R350 000 a year or less, and up to R600 000 for students with disabilities. It can cover tuition, accommodation and allowances. Applications open once a year, so put the closing date in your calendar.
Many employers, government departments and private companies offer bursaries, often for scarce skills, sometimes in return for working for them afterwards. The Funza Lushaka bursary, for example, supports students who train to become teachers. For school fees, parents at public schools who cannot afford the fees may apply to the school for a full or partial exemption.
Study loans from banks
Several banks offer loans made for studying. The money is often paid straight to the institution, and the loan usually needs a parent or guardian as surety, because the student has no income yet. Many study loans let the borrower pay only the interest while studying and start paying off the capital after graduation, which keeps the monthly amount low but adds interest over the years.
Ask the bank whether the loan covers only tuition or also books, a laptop and accommodation, whether you have to reapply every year, and what happens if the student fails a year or changes course.
Using a personal loan
A personal loan is paid to you and can be used for any study costs, which helps when the amount is small or the bank's study loan does not fit. It is unsecured, and the law caps its interest at the repo rate plus 21% a year — 28.25% a year at today's repo rate — plus an initiation fee and a monthly service fee. Repayments start in the first month, so the instalment has to fit the borrower's current income.
Because study costs come back every year, a loan for one year's fees can turn into several loans running at once. Before you borrow, estimate what the whole qualification will cost and how you will pay for the later years.
Payment plans and timing
Universities, colleges and private schools often let you pay fees in monthly instalments without interest, sometimes after a registration fee. That is usually cheaper than any loan. Ask the finance office early: some plans must be arranged before registration closes.
What a lender looks at
Every registered lender must check that the borrower can afford the repayments before it lends. It looks at income, existing debt repayments and living expenses, and checks the credit record at one or more credit bureaus. For a parent borrowing for a child's fees, that means the parent's own income and debts decide the amount, not the cost of the course.
Most lenders ask for a South African ID, three months of bank statements or payslips and proof of address. A study loan may also ask for the student's acceptance letter, the fee statement and the surety's documents. Having these ready shortens the time to a decision, which matters when registration closes on a fixed date.
How RandScout helps
We ask four short questions about the amount, income, employment and credit record and show only the providers that may consider you. You apply on the provider's own site. Comparing here does not leave an enquiry on your credit record.