Student Loans for Unemployed Students (4 Banks)

If you are planning to pursue higher education but don’t have a wealthy background to support your education, chances are you must have considered obtaining a student loan. The cost of studying is exceptionally high in South Africa, making it challenging for poor students with underdeveloped backgrounds to pursue education.

Moreover, the expenses associated with accommodation, registration fees, tuition fees, and study materials are not cheap.

This guide will explore in depth the different student loans available to unemployed students in South Africa, providing comprehensive information and guidance to assist in making well-informed decisions.

Banks that offer Student Loans

South African students have various options to choose from when it comes to securing loans for academic purposes, including government organizations, banks, and private financial institutions. Unlike bursaries, student loans are designed to be repaid with interest after completing your qualification and entering the employment program phase.

Moreover, as a student, you must manage the loan and interest payments while studying and repay the principal amount upon completing your studies. In addition, in certain cases where full-time students struggle to secure employment to cover the loan, guardians or parents can step in and handle the repayment responsibilities.

Additionally, some financial institutions require the borrower to clear the debt upon completing their studies, while others offer flexibility, allowing repayment once the borrower secures employment. Furthermore, interest rates vary among institutions; some have fixed rates, while others determine rates based on the applicant’s credit score. If you are seeking information about student loans in South Africa, explore the list provided below:

1. Standard Bank South Africa for Student Loans

Standard Bank stands as a prominent South African banking and financial services conglomerate. It holds the position of Africa’s largest lender in terms of assets. If you are a student looking for a loan, you can reach out to Standard Bank for potential financial assistance.

The Standard Bank student loan offers various options, allowing borrowers to choose between part-time and full-time student financing. Moreover, if you are a student who does not have a job, you can apply for the “Standard Bank Student Loan without Surety.” If individuals are enrolled in one of the designated pilot institutions, they have the opportunity to apply for a Student Loan without surety.

The exciting part about the Standard Bank Student Loan is that students can repay the loan after finishing their studies. The benefits of Standard Bank Student Loan are as follows;

• You can qualify without a surety or any income.
• The funds can cover various education expenses, including books, tuition, accommodation, and essentials like a laptop.
• Tuition fees will be deposited into the university account, using your details as a reference.
• The loan features a competitive interest rate.
• Every month, interest and service fees apply and are added to the amount you know.
• You can use the loan to settle existing outstanding fees linked to your current course and university.
• There is no immediate pressure to start repaying the loan before completing your studies.
• Additionally, you can pay off your loan earlier than planned without facing any penalties.
• Students have the flexibility to start repaying the loan either six months after finishing their studies or when they begin earning.
• You can also enjoy flexible repayment options tailored to your affordability.

Maximum Loan Per Year of Studies: R120,000

Covered: Tuition, Accommodation, Books, and Educational Equipment

2. Nedbank Student Loan

Another option students can go for when looking for loans is Nedbank. Nedbank, similar to Standard Bank, provides loan services to students who lack financial assistance to fund their education. The best thing about Nedbank is its flexibility to offer part-time as well as full-time loan services.

In the case of full-time students, the guarantor is responsible for paying only the monthly interest on the loan until the student completes their studies. Students can repay the loan after successfully completing their studies. Meanwhile, for part-time students, the repayment consists of both the loaned amount and its monthly interest from the beginning.

• Moreover, if you are obtaining a loan from Nedbank, it is essential to note that you must reapply each year if your studies extend beyond one year.
• Along with your application, you need to provide evidence of your results and confirmation that you have successfully completed your previous academic year.
• If you are applying for a full-time student loan with Nedbank, keep in mind that they require a guarantor for such applicants. This is due to the fact that full-time students typically don’t have their own income. Therefore, a guarantor is needed to ensure responsibility for monthly interest.

Covered: Books, Accommodation, Fees, and other costs

3. National Student Financial Aid Scheme (NSFAS)

NSFAS is a financial aid scheme introduced by the South African government. It aims to offer financial assistance to undergraduate students, aiding them in covering the expenses of their higher education following the completion of high school. The Department of Higher Education and Training provides the funding for NSFAS.

When applying for the NSFAS student loan, the process mirrors that of a bursary application. Accepting the terms and conditions is requisite, and these align closely with a bursary application. Moreover, applicants who were declined for a 2024 bursary scheme due to a household income surpassing R350,000 will automatically pre-qualify for a loan if their family income is below R600,000.

In addition, students who have previously applied for the NSFAS bursary scheme are not required to submit a new application for the student loan scheme. Applicants for the new scheme are required to fulfill the provided interim criteria:

• Applicants should have annual household income ranging from R350,000 to R600,000.
• They must be admitted to a TVET College or public university for either Undergraduate or Postgraduate studies.
• Applicants are accepted for years 1,2,3 or 4 of their academic program.
• If eligible for a loan, applicants are required to sign a loan agreement.

Covered: Accommodation, Textbooks, Fees, and other studies-related expenses

4. Sanlam Student Loan

If you are unemployed and looking for a student loan to fund your education, then there is no better option than a Sanlam student loan. Sanlam provides student loans customized to meet the needs of both students and their parents or guardians.

Furthermore, the package includes a repayment plan with greater flexibility. As a student, you have the option to repay the money after completing your studies without worrying about immediate repayment pressure. In addition, Sanlam student loans feature a low interest rate compared to personal loan interest.

Covered: Study-Related costs

Requirements for Student Loans in South Africa

Keep in mind various banks and loans come with distinct interest rates. Therefore, before you borrow a loan from any financial institution, it is necessary to understand the interest charges associated with your chosen loan. Different institutions may have significant variations in their interest markup compared to others.

When applying for a student loan, make sure the institution providing the loan is registered to avoid problems later on. Additionally, ensure that both you and your guardian/parents applying do not have an unfavorable credit history.

Applying and fulfilling the necessary requirements are necessary steps to qualify for a loan. Let’s look at the requirements:

Proof of Academic Result

It depends on your most recent degree. Ensure you provide the loan-providing institution with evidence that you have successfully completed your last degree.

Proof of Expenses

Another crucial requirement for the financial institution to approve your loan application is evidence of expenses. The financial institution will request proof that you have specific expenses related to your study needs.

You can create a comprehensive list of expenses covering textbooks, stationery, and study materials, along with their respective costs. Include accommodation fees, tuition fees, and food expenses in the list.

Relevant Documents

The financial institution requires FICA documents and a person standing surety to approve the loan application. These documents should contain evidence of residence, ensuring the proof is not older than three months. Both the student and surety are required to provide proof of residence.

Additionally, ID documents for both the student and surety will be requested. The FICA documents also encompass three months’ pay slips from the surety and three months’ bank statements of the surety.

Acceptance Letter

Providing the institution with essential documentation is crucial for loan approval. Obtain an acceptance letter from the institution you plan to attend, make a photocopy, and submit it. Alternatively, you can also present proof of enrollment or registration at college.

In conclusion, multiple financial institutions offer student loans to unemployed students, allowing them to pursue their education. You have various options to choose from when planning to seek student loans. The information provided in this guide will help you make an informed decision.