A student loan is credit, and it is regulated as credit. Before taking one, the question worth answering is whether you need it at all — because the money you never have to repay should be exhausted first.
This page sets out what lenders require, and the order in which to look for funding.
Eligibility Requirements at a Glance
What a student loan application generally requires.
- A student aged 18 or older, or a parent or guardian applying on their behalf
- South African citizenship or permanent residence, in most cases
- A valid South African ID or smart ID card
- Acceptance or registration at a recognised institution
- A surety or co-applicant with a verifiable income, in most cases
- Proof of the surety’s income and a satisfactory credit record
- An affordability assessment, required by law
- A fee structure or invoice from the institution
- A South African bank account for disbursement and repayment
Income and Affordability Requirements
The income tested is usually the surety’s, not the student’s. Most students have no income, so a parent, guardian or other person signs as surety and their affordability is what is assessed. A surety is personally liable for the debt if the student does not repay — that is what the signature means, and it should be understood before it is given.
Affordability assessment is a legal requirement. The National Credit Act 34 of 2005 obliges a lender to assess whether you can meet the obligation, using your income and existing commitments. Granting credit without that assessment is reckless lending, and a court can set aside a reckless agreement.
Interest usually accrues from disbursement, even where repayment of capital is deferred until after graduation. Interest-only repayment during study is the common structure, with full repayment starting after the course ends. Ask for the total cost of credit over the full term, not the monthly figure.
Use the section 92 quotation. Under the National Credit Act a pre-agreement statement and quotation must be given, and it is valid for five business days at the quoted rates. Use those five days to compare lenders on identical terms.
Credit life insurance is commonly required and settles the balance on death or permanent disability. You may substitute your own policy of at least equivalent cover. Where it is on the account, the estate or the surety should claim on it — this cover is very widely unclaimed.
Credit and Financial Requirements
Exhaust free money first, in this order. This is the part most families get wrong, and it deserves a deliberate effort before any credit agreement is signed.
- NSFAS — a bursary for qualifying students at public universities and TVET colleges, not a loan, with its own household income threshold and closing dates
- The institution’s own bursaries and scholarships, including merit awards applied automatically and others that must be applied for
- Employer bursaries, including a parent’s employer, which many employees never think to ask about
- Sector and company bursaries in engineering, accounting, health, education, mining and agriculture, frequently with a work-back obligation
- Government departmental bursaries, including the Funza Lushaka bursary for teaching
- SETA and professional body funding in scarce-skill fields
- The institution’s financial aid office, which knows about funds that are never widely advertised
- Only then a student loan, for the balance that remains
Documents and Verification Required
What lenders require.
- The student’s South African ID or smart ID card
- The surety’s South African ID
- The acceptance or registration letter from the institution
- The institution’s fee structure or invoice, including residence and books where funded
- The surety’s recent payslips, generally the latest three
- The surety’s bank statements, generally the latest three months
- Proof of residence for both parties
- Consent to a credit bureau check
- A completed application in the lender’s current form
How to Apply and Improve Approval Readiness
Check your credit report first. You are entitled to a free credit report each year from each registered bureau. Errors are common and are corrected free of charge, but not quickly — check before applying, not after a decline.
Compare on the total cost of credit — interest rate, initiation fee, monthly service fee and credit life premium over the full term. Two loans with the same monthly instalment can differ substantially in total.
Borrow only the shortfall — what is left after bursaries, family contribution and any earnings, not the full cost of study.
Fund tuition first and the extras afterwards. Books, a laptop and residence can often be covered more cheaply, or not at all.
If repayment becomes unaffordable, talk to the lender before defaulting. Debt review under section 86 of the National Credit Act is a statutory process through a registered debt counsellor that restructures obligations, and it is far better than a judgment.
There is no blacklist. Credit bureaux hold payment records for prescribed periods, and nobody can remove accurate information for a fee. Anyone offering to clear your name for payment is defrauding you.
Never pay an upfront fee to be granted a loan. A registered credit provider deducts its fees from the advance or adds them to the account. An upfront payment demand is advance-fee fraud.
Check the lender is registered with the National Credit Regulator before signing anything.
Frequently Asked Questions
Should I apply for NSFAS or a loan?
NSFAS first — it is a bursary rather than a loan for qualifying students at public institutions. Exhaust bursaries and scholarships before borrowing, then borrow only the shortfall.
Do I need someone to sign surety?
Usually yes, because most students have no income. A surety is personally liable for the debt if the student does not repay, which should be understood before signing.
Does interest run while I study?
Commonly yes, from disbursement, even where capital repayment is deferred. Interest-only repayment during study is the usual structure. Ask for the total cost of credit over the full term.
I cannot repay. What are my options?
Contact the lender before defaulting. Debt review under section 86 of the National Credit Act is a statutory process through a registered debt counsellor and is far better than a judgment.
Interest rates, fees, credit criteria and funding thresholds are set by each lender and by NSFAS and are revised. Confirm current terms with the lender and with NSFAS, and verify registration with the National Credit Regulator.