{"id":15961,"date":"2021-11-20T06:43:29","date_gmt":"2021-11-19T21:43:29","guid":{"rendered":"http:\/\/zeustool.com\/?p=15961"},"modified":"2021-11-20T07:14:21","modified_gmt":"2021-11-19T22:14:21","slug":"thinking-of-taking-out-a-student-loan-read-this-26","status":"publish","type":"post","link":"http:\/\/zeustool.com\/?p=15961","title":{"rendered":"Thinking of taking out a student loan? Read this first"},"content":{"rendered":"<p><title>Thinking of taking out a student loan? Read this first<\/title><\/p>\n<p>A recent survey conducted by Sanlam revealed that more than 90% of participants viewed education as key to their future success. But with the rising cost of tertiary education, is taking out a student loan worth it? Consider these points before going ahead.<\/p>\n<h2>Student loan vs personal loan<\/h2>\n<p>Student loans are tailored to the needs of students and their parents or guardians, whereas personal loans are set transactions with a credit provider or financial institution for more general purposes.  Repayment terms Russell Dickerson, president of the Debt Counsellors Association of South Africa, says: \u201cStudent loans have more flexible conditions in terms of time periods. The one bank I know grants a new student loan for each year of study.\u201d Unlike a personal loan, many student loans offer repayment terms where you only need to start paying back the borrowed amount after you\u2019ve completed your studies and are able to work.<!--more-->  Interest rates \u201cA student loan normally carries a lower interest rate than personal loans,\u201d says Ayanda Ndimande, strategic business development manager at Sanlam Personal Loans. That said, she emphasises the importance of researching different student loan providers to find the one best suited to your study plan and your pocket. \u201cWhen deciding on taking the student loan, do your homework. Compare interest rates and the repayment processes.\u201d  The application criteria One of the things to look out for to distinguish between a student loan and personal loan is whether proof of registration at a tertiary institution is an application requirement. \u201cYou will need to supply tertiary institution registration details to qualify for a student loan,\u201d says Dickerson.  Responsible credit With lower interest rates and the intention to upskill and improve your future earning potential, taking out a student loan can be worth the short-term debt for long-term financial success. \u201cA student loan can pave the way towards empowering yourself and your loved ones,\u201d says Ndimande. \u201cThis is a great example of responsible credit, <a href=\"https:\/\/yourloansllc.com\/easy-loans-online\/\">easy payday loan faxless<\/a> if credit is required to pay for these costs.\u201d<\/p>\n<p>As a Reality Core, Plus or Health member, you can get rewarded for smart financial choices by earning cash back of up to 20% when you repay your Sanlam Personal Loan consecutively over 12 months.<\/p>\n<h2>What interest rates can I expect?<\/h2>\n<p>Student loans generally carry lower interest rates compared to personal loans, but this doesn\u2019t mean you should forego researching the different loan providers. Shop around for the loan that has low interest and terms and conditions that suit you, says Dickerson. \u201cBe aware that there are some high-interest loans that are called education loans but are really just expensive personal loans. They often do not even have deferred payment terms,\u201d cautions Dickerson. Always ensure you take a loan from a registered credit provider or financial institution with a good reputation.<\/p>\n<h2>The responsibility of a surety<\/h2>\n<p>If you\u2019re entering into a loan agreement, you\u2019re likely to be asked to include the details of a surety as part of the contract. This protects the lender from any defaults on payment you could make. \u201cA surety binds that person to stand in for the repayment of the loan should the lender default on payment,\u201d explains Dickerson. Many sureties pay the interest portion for the period of the loan to prevent it growing too much, until [the student] graduates and starts working.<\/p>\n<p>Before approaching the person you have in mind, take note that a surety is a legal instrument. \u201cVery often [the loan] is for a child and the bank won\u2019t grant it unless a surety is signed, so people sign without considering the consequences,\u201d says Dickerson, \u201cthe most serious of which is that at a time when you are not financially prepared, you may be required to pay back a loan.\u201d<\/p>\n<p>While a signed surety could argue that the student can repay the loan after three years, the truth is that the future is unpredictable. You don\u2019t know if, for example, they could fall ill after their studies and will therefore be unable to work and repay the outstanding balance. If you sign surety, you must be able to pay back the loan on the loan applicant\u2019s behalf in the case of an emergency.<\/p>\n<h2>Repayment plans: your options<\/h2>\n<p>Dickerson and Ndimande suggest some key considerations before choosing a repayment plan suited to you. First look at your affordability: how much of your salary after your studies can go towards repaying the outstanding loan balance. \u201cIf you are sure of an annual increase, then you could build that in,\u201d says Dickerson. Then calculate how many months it will take to repay the capital amount (the original amount you\u2019ve borrowed), plus interest and account charges. Finally, prioritise settling of debt if you do get access to more cash during the repayment term. \u201cIf the amount that you originally agreed to becomes easily payable, then increase your repayments and pay the whole loan off earlier, saving on interest and fees,\u201d says Dickerson.<\/p>\n<p> Alternatives to student loans \u201cBefore taking out any sort of loan to finance your studies, explore all your options,\u201d says Ndimande. \u201cFirst try and apply for as many grants, bursaries or scholarships as you can find and possibly qualify for.\u201d There are some funding options with criteria, like a maximum household income, which could be worth exploring. An example, says Dickerson, is the National Student Financial Aid Scheme (NSFAS). \u201cNSFAS is an option if the joint household income is less than R350 000 gross (before deductions). There is no surety, and flexible repayment terms when you start working, depending on your salary,\u201d he explains. If you want to save up towards studies, a qualified financial planner is best positioned to help you create a savings plan best suited to you. Book a meeting with one today to explore your options.<\/p>\n<p>Use this savings tool to help you get closer to your goals.<\/p>\n<p> Speak to an expert financial planner today to explore your options when it comes to reaching lifetime goals, like education. Book a meeting here. <\/p>\n<h2>Want to learn more?<\/h2>\n<p>We send out regular emails packed with useful advice, ideas and tips on everything from saving and investing to budgeting and tax. If you&#8217;re a Sanlam Reality member and not receiving these emails, update your contact details now.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Thinking of taking out a student loan? Read this first A recent survey conducted by Sanlam revealed that more than 90% of participants viewed education as key to their future success. But with the rising cost of tertiary education, is taking out a student loan worth it? Consider these points before going ahead. Student loan [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3045],"tags":[],"class_list":["post-15961","post","type-post","status-publish","format-standard","hentry","category-easy-payday-loans-reviews-2","entry"],"_links":{"self":[{"href":"http:\/\/zeustool.com\/index.php?rest_route=\/wp\/v2\/posts\/15961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/zeustool.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/zeustool.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/zeustool.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/zeustool.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15961"}],"version-history":[{"count":1,"href":"http:\/\/zeustool.com\/index.php?rest_route=\/wp\/v2\/posts\/15961\/revisions"}],"predecessor-version":[{"id":15962,"href":"http:\/\/zeustool.com\/index.php?rest_route=\/wp\/v2\/posts\/15961\/revisions\/15962"}],"wp:attachment":[{"href":"http:\/\/zeustool.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/zeustool.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15961"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/zeustool.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}