University fees keep rising, and not everyone qualifies for NSFAS or bursaries. If you’re stuck in that middle-income bracket where you don’t get free funding but also can’t afford tuition upfront, student loans might be your best bet.
This guide breaks down everything you need to know about student loan options in South Africa, including bank loans, private financing, and alternative funding sources. You’ll learn how to qualify, what to watch out for, and how to make the smartest decision for your future.
Types of Student Loans in South Africa
There are different types of student loans depending on where you apply and the repayment structure. Let’s break them down:
1. Bank Student Loans
These are the most common types of student loans offered by major banks like Standard Bank, ABSA, Nedbank, and FNB. They cover tuition, accommodation, and study materials, but repayment terms vary.
- Interest Rates – Rates vary depending on whether you have a guarantor (parent/guardian). Secured loans (backed by collateral) tend to have lower interest.
- Repayment Terms – Most banks require interest to be paid while studying, with full repayment starting after graduation.
- Who Qualifies? – You need a parent or guardian to co-sign unless you’re earning an income.
2. Government-Backed Student Loans
These loans are partially subsidized by the government and often have more flexible repayment terms.
- Example: The Ikusasa Student Financial Aid Programme (ISFAP) assists students in the “missing middle” who don’t qualify for NSFAS.
- Lower interest rates than private loans.
- Repayment begins after graduation, usually when employed.
3. Private Student Loan Providers
Non-bank financial institutions also offer student loans, often with flexible repayment plans and unique benefits.
- Examples: Fundi, Capitec Student Loans.
- More flexible repayment options.
- Often easier approval process than banks.
4. Employer-Sponsored Student Loans
Some companies offer student loans as part of employee benefits or bursary programs.
- Examples: Investec, Sasol, and Vodacom offer loans for specific degrees.
- May cover tuition in exchange for a work-back agreement.
- Great option if you’re studying for a high-demand career.
How to Qualify for a Student Loan
Most lenders will check a few key factors before approving your loan:
- Credit Record – If you’re applying with a parent/guardian, their credit history matters.
- Proof of Income – Lenders want to ensure you (or your guarantor) can repay the loan.
- Proof of Enrollment – You must be accepted into a recognized university or college.
- Residency Status – Most loans are only available to South African citizens.
Pros & Cons of Taking a Student Loan
Pros:
- Covers full tuition, accommodation, and study materials.
- Allows you to study even if you don’t have immediate funds.
- Flexible repayment options after graduation.
Cons:
- High interest rates mean you’ll pay more over time.
- Monthly repayments while studying can be a financial strain.
- Some loans require a guarantor, limiting access for independent students.
Tips to Get the Best Student Loan Deal
- Compare Interest Rates – Always shop around before signing.
- Understand Repayment Terms – Check if interest must be paid while studying.
- Look for Payment Breaks – Some banks allow a grace period after graduation.
- Check for Loan Forgiveness or Work-Back Agreements – Some companies cancel debt if you work for them after graduation.
Student loans can be a lifeline if you don’t qualify for NSFAS or bursaries, but you must borrow wisely. Choose a loan with the lowest possible interest rate, plan your repayments carefully, and avoid unnecessary debt.
If you need financial assistance, explore all options—including bursaries and scholarships—before committing to a loan.