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Home Funding Information Student Loans in South Africa: What you need to Know

Student Loans in South Africa: What you need to Know

by Janine Basel

Tertiary studies are expensive, there’s no way around it. Luckily though, you have options to finance it – student loans in South Africa are a realistic option, and they are readily available.

Student loans (usually) work like this

A student and a parent (with an income) apply for a loan to the student, where the parent is required to pay the interest portion of the loan on a month-to-month basis while the student is studying. The capital amount sits in the student’s name, and the student is required to repay the loan through monthly installments upon graduating.

Are they good or bad? 

It’s difficult to say whether funding your studies through a student loan is a good or bad idea because it largely depends on the circumstances.

The bottom line: If not taking the loan would mean not studying, take the loan! Otherwise, avoid it wherever possible.

It’s never a good idea to start life off with debt, but if you can get a leg up by doing so (ie: you gain a tertiary education), then it probably is a good idea. Just make sure you consider everything below.

Things to consider

  1. Interest on student loans is not zero-rated! There is a common misconception that student loans bear no interest, or very little. The complete opposite is true – there is a huge amount of interest on student loans, comparable to any other household debt.
  2. If you study away from home, your bill over a 4-year degree is likely to come to around R400,000. Carefully consider all of your university options. You may be itching to move out and be independent, but the price of the repayments may not be worth it. They calculate how much you need to repay after graduation based on your salary. If you study while living at home, that’s closer to R200,000 to repay. It’ll take half the amount of time to repay a loan if you stay at home. Carefully consider this when getting a loan.

The loan issuer (a bank, usually) ordinarily allows the student 3-6 months after graduating before they are required to start making repayments, and this term can sometimes be extended if you bring flowers for your banker. The idea with this is to give the student a fair opportunity to find a job after graduating. If, however, the free pass term expires, the parent (or whoever else stood surety for the loan) will be required to cover the repayments.

 The money from the student loans gets deposited straight into your bank account, and you can use it as you please. Please, don’t spend it on other stuff! Students often pay their tuition fees upfront with student loan money, and when they see they have R15,000 left over, they spend it at the local bar and getting concert tickets… Don’t do it!

What you need to prepare

When applying for a student loan you’ll need:

  • Yours and your parent’s green, bar-coded ID book (or ID card)
  • Your parent’s proof of income (latest payslip)
  • Proof of address of your parent
  • Proof of enrolment at a qualified tertiary institution

When you go to the bank, you’ll simply hand over all the documentation, fill in some forms (make sure you know the full names and level of your degree), and you’ll have to give them a number as to how much money you need. The amount they give you will, of course, be dependent on your parent’s credit history and income bracket. A piece of advice here is when they ask you for estimates of your expenses, just say very, very low numbers – the algorithms won’t pick up on the fact that it’s impossible for a family of four to survive on R200 of food a month.

A few more things

The biggest and best student loan providers include First National Bank, Standard Bank, Nedbank, Absa Bank, Fundi and the government’s National Student Financial Aid Scheme (NSFAS). We suggest taking a look at Fundi and FNB, as they both are really jacked up with their technology which makes things much easier. NSFAS is the biggest loan issuer in SA, and they’ll help you through every step of the process too, which is helpful. For anyone with very little household income, the NSFAS is the best place to turn to fund your studies, as they are willing to work with you even if you don’t have a parent with an income to stand surety for your loan.  Government has also stepped this up by introducing fee-free education.

Choose the correct loan issuer

If you decide you do want to take a student loan you need to consider which issuer is best for you.

Important: When browsing the different loan issuers, try to think ahead!

Here’s a breakdown of what each of the student loan providers entails:


Fundi has the following student loan options for:

  • Study loans (school and tuition fees, registration fees, exam and outstanding fees)
  • Study tools (textbooks, technology, study equipment)
  • Accommodation (covered during studies)


  • Fixed monthly repayments
  • You need four documents to apply and will receive a response within 48-72 hours.
  • No deposits
  • The study loan is paid directly to the institution
  • No limits
  • Anyone can apply on your behalf (they need to be fully employed and meet the criteria stated on their website)

FYI: Interest rates and repayments will vary according to the institution and the applicant’s profile.

For more information go to Fundi’s website or phone 0860 55 55 44

First National Bank

What they cover?

  • Tuition fees
  • Books
  • Campus Accommodation


  • Personalized interest rate
  • Access to loans from R4,000 to R80,000*
  • While you study students only pay interest on your loan and can pay the rest after the student has graduated.

FYI: A new application is required each year you start studying.

For more information go to FNB’s website or phone 0861 40 40 40

National Student Financial Aid Scheme (NSFAS)

NSFAS is the biggest loan issuer in SA, and they’ll help you through every step of the process too, which is helpful. For anyone with very little household income, the NSFAS is the best place to turn to fund your studies, as they are willing to work with you even if you don’t have a parent with an income to stand surety for your loan.

For more information go to NSFAS’ website or contact them via phone and email below:

Tel No: 0860 067 327


Standard Bank

If you are a full-time student, you will also get the Standard Bank transaction account that best suits your needs when your Student Loan is approved.

What they cover?

You can use the money from your Student Loan to pay for your tuition fees and accommodation (if you are a full-time student not living at home).


  • Tuition and accommodation will be paid directly to the institution and place of residence whilst funds for books will be transferred to the transactional account.
  • Student Loans are granted for a specific year of study and you will have to reapply for each year of registration.
  • There is a maximum amount granted for each year of study.
  • A once-off initiation fee and monthly service fee will be charged on your student loan.

For more information go to Standard Bank’s website or phone 0860 123 000


What they cover?

  • SETA and SAQA courses
  • textbooks
  • accommodation and equipment


  • Earn a monthly income of minimum R3000 per month
  • Approved based on their affordability and risk
  • Pay the prime interest rate on their study loans
  • Customers are offered 15% discount on study equipment when they apply for a study loan
  • The study loan forms part of the Student Package, which includes a student credit card and a cheque account

For more information go to ABSA’s website or phone 0860 100 372

EduConnect’s Take

Only ask for the amount you need, no more! Don’t get stuck in a situation with too much debt after graduating. It’ll take 20 minutes, and they’ll approve or decline you on the spot. 48 hours later you should have the money in your account. Just make sure you check on your loan issuer’s specific documentation requirements, as this can be a real stickler.

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