Student loan applications increase by 6%, South African bank says

Student loan applications increase by 6%, South African bank says

Times are hard in South Africa and cash is scarce, and studying at a tertiary level costs an arm and a leg. But high school graduates’ desire to take their studies to the next level is alive as ever, so they turn to banks to loan money to help them realise their dream.

South Africa’s First National Bank (FNB) revealed this week that its student loan applications portfolio has increased by 6% in 2013, with the bulk (42%) coming from the wealthy province of Gauteng and Western Cape following distantly in second place with 15%.

On average, loans are taken over 12 months for around R50 000 (about US$5 000), the bank said.

The bank also said that demand for student loans has increased as families are now placing a much greater emphasis on tertiary qualifications in a competitive labour market.

The majority of students are studying towards a diploma (24%), followed by 14% studying for a BA degree and 9% studying towards a computer science qualification, FNB said.

“Student Loans are a sound investment in a student’s future and a convenient way to pay for tuition fees, computers, books, and sometimes even accommodation,” CEO of FNB Personal Loans Pieter du Toit said in a statement.

“These loans are easily accessible providing the student’s parent or guardian earns more than R6 000 (US$600) per month and the application meets certain criteria,” he explained.

The FNB Life Start Student Loan offers a six-month payment holiday on the capital portion of loan from the date of graduation, the bank said, adding that interest payments must be made from the date of taking the loan.

The minimum loan amount is R4 000 (US$400).

The following documents need to be submitted before one’s application gets a response:

•    Identity books of parents/guardians and students are required

•    Quote from the institution showing the cost of the course and a letter of acceptance/proof of registration.

•    Additional documents from customers of other banks and for larger amounts are also required.

Students can re-apply for additional amounts at any time after the loan has been granted, the bank said. FNB customers’ applications can be completed via Online Banking, in a branch or via a Call Centre, FNB added.

Photo: SA Knowledge

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