How to get a student loan in South Africa

Most people assume student loans are traps waiting to ruin their future. The truth is, handled right, they’re tools and temporary support that let you focus on studying instead of struggling for cash. South Africa has options that can work in your favour if you know where to look.

The National Student Financial Aid Scheme, or NSFAS, is the government’s main offering. It’s designed for students from lower-income households and can cover tuition, accommodation, and living costs. Some of the loans can even turn into a bursary once you finish your studies, making it less like a debt and more like a connection to your degree.

Private lenders like Standard Bank, Capitec, FNB, and ABSA also offer student loans, each with different rules around repayment, loan amounts, and guarantors. Many pay the funds directly to your university, so you don’t have to worry about juggling payments yourself.

When picking a loan, you need to find one that matches your situation and won’t haunt you after graduation. Comparing interest rates, repayment schedules, and eligibility rules upfront makes all the difference. In this article, we’ll help you figure out the right loan options as a student in South Africa and give you a breakdown of what you need to know.

Read also: How to get a student loan in Liberia

Who qualifies for a student loan? 

Student loans are meant to support students who can demonstrate both academic commitment and financial need. The rules vary depending on whether the funding comes from the government, a private bank, or a community-based scheme, but some criteria are common across all types of loans.

• South African citizenship or permanent residency: Most loans require applicants to be South African citizens. Some private lenders accept permanent residents, but the documentation must be official and current. Citizenship ties the loan to national regulations, including repayment options and eligibility for government schemes.
• Acceptance into an accredited institution: You must be enrolled or have an official offer from a recognized university, college, or Technical and Vocational Education and Training (TVET) institution. Lenders need to verify the institution’s accreditation before approving any loan.
• Academic performance: Many loans, especially government-backed ones like NSFAS, have minimum academic standards. For example, passing your previous year’s courses or achieving a specific Admission Point Score (APS) can influence approval. Consistent academic performance ensures the loan supports students likely to complete their studies.
• Income and financial need: Income thresholds determine eligibility for need-based loans. NSFAS, for instance, serves students from households earning R350,000 or less per year. Students with disabilities may qualify with household income up to R600,000. Some private loans are not strictly income-based but may consider a guarantor or proof of repayment capacity.
• Creditworthiness and surety: Banks require proof that the borrower or a guarantor can repay the loan. This may include a co-signer, credit history, or a formal declaration of income. Government loans like NSFAS usually do not need sureties, while private loans often do.
• Community or tribal schemes: Certain groups, such as the Royal Bafokeng Nation, have dedicated student loans for members. These programs combine financial need and academic standards but may include additional rules, like an APS minimum or local residency requirements.

Step-by-step guide on how to apply successfully for a student loan

Applying for a student loan is straightforward if approached methodically. Each step builds on the previous one, and skipping details can delay approval or even result in rejection. The key is preparation, organization, and understanding the lender’s requirements.

• Confirm your admission: Start with an official acceptance letter from your university, college, or TVET institution. Lenders will verify your enrollment before releasing funds. Without this, applications are often rejected or stalled.
• Identify the right loan option: Compare government schemes, private banks, and community-based programs. Each has different eligibility rules, coverage, repayment terms, and documentation requirements. Choosing the right option increases your chances of approval and minimizes financial strain later.
• Gather documentation: Compile all documents before starting the application. Typical requirements include:
  • Certified ID copy or permanent residency permit
  • Proof of household income or an affidavit if unemployed
  • Academic records (matric or previous year results)
  • Admission letter from the institution
  • Proof of residence, if required by certain lenders
  • Guarantor documents, if applying through a private bank that requires surety
• Complete the application form: Fill in all sections accurately. Double-check details like contact information, income figures, and bank account numbers. Incomplete or incorrect forms are the most common cause of delays.
• Submit and track your application: Submit online or in person, depending on the lender. Keep confirmation receipts or reference numbers. Follow up regularly to track approval status, especially for government schemes like NSFAS, which can have high demand and longer processing times.
• Clarify terms before acceptance: Read the loan agreement carefully. Understand interest rates, repayment schedules, deferral options, and any fees. Asking questions before signing prevents surprises later.
• Plan for disbursement: Once approved, funds are usually paid directly to your institution. Check that the payment schedule aligns with your tuition deadlines. Confirm that funds cover all intended costs, like accommodation or textbooks, if included in your application.
• Maintain communication: Keep contact details up to date with the lender. Respond promptly to any requests for additional documents or clarification. Proactive communication avoids unnecessary delays or complications.

Read also: How to get a student loan in Canada as an international student from Botswana

Interest rates, fees, and repayment 

Student loans cover tuition and living expenses, but they are not free money. Understanding how much a loan will cost over time is essential for making informed decisions. The expenses involved go beyond the principal; interest, service fees, and repayment schedules all form the total financial burden.

Interest rates

Interest rates determine how much your loan grows over time. Government-backed loans like NSFAS are subsidized. They either charge no interest during your studies or a minimal administrative fee, which only starts counting once your income surpasses a set threshold. This approach keeps repayments manageable and ties them to your ability to pay, rather than your debt spiralling out of control while you’re still studying.

Private banks operate differently. Commercial loans carry interest rates that can range from 10% to 20% per year, depending on the lender, loan amount, and your credit profile. Unlike NSFAS, these rates compound over time, so delaying repayment can significantly increase the total amount owed. Understanding the type of interest and how it accrues is essential before committing to a loan.

Service fees and administration charges

Beyond interest, many loans include service fees. Private lenders charge an initiation fee or monthly administration fees, typically 1–5% of the total loan. These fees are added to your principal, meaning they also accrue interest, subtly increasing the overall cost. Small percentages may seem negligible, but on larger loans, they add up quickly. Government loans keep fees minimal. The administrative costs are built into the system rather than tacked onto the student’s debt, making the total amount owed closer to the actual funding you received. 

Read also: How to get a student loan in Ghana

Repayment schedules

Repayment schedules define when and how much you pay back. Private loans start a few months after funds are disbursed or after graduation. Payments are fixed and must be made regardless of your income, which can strain new graduates if not planned properly.

NSFAS and some other government loans follow an income-contingent model. Payments only begin once you earn above a certain threshold, and the amount scales with your income. This system reduces pressure immediately after graduation, making the loan more adaptable to your financial situation.

Loan amounts and limits

Loan amounts vary depending on your chosen institution, tuition costs, and eligibility. NSFAS can cover full tuition, accommodation, and some living expenses for qualifying students, ensuring that the loan meets actual study needs rather than arbitrary amounts. Private banks offer set maximums, like R500,000 at Capitec or FNB, and may limit funds for living costs or materials. Understanding your borrowing limit and what it covers helps you plan additional funding, if needed, from part-time work or bursaries.

What to do if your loan application is declined or delayed?

Getting turned down for a student loan or experiencing long delays is common. The key is to stay proactive instead of panicking. Understanding why the application was declined helps you plan your next steps and avoid repeating the same mistakes.

Start by checking the reasons for the decline. Is it something fixable, like missing documents, incorrect income information, or not meeting a minimum academic requirement? Contact the lender to clarify the exact issue and ask if reapplication is possible. Delays can also happen when processing volumes are high, so knowing the expected timelines prevents unnecessary stress.

If a loan isn’t immediately available, alternative funding can help. Bursaries and scholarships are worth exploring; they often target specific courses, universities, or demographic groups. Family support or structured payment plans with your institution can cover immediate tuition needs. Smaller digital loan platforms, like Fundi or RainFin, can provide short-term funding for textbooks, registration fees, or accommodation.

Be cautious with offers that seem too easy or promise instant cash. Predatory lenders target students with high-interest loans, hidden fees, and strict repayment conditions. Always check eligibility criteria and read the fine print. Combining multiple smaller, verified sources of funding can be safer and just as effective as a single large loan, keeping your debt manageable while you secure your studies.

Read also: How to get a student loan in the US as an international student from Zimbabwe

Turning loans into opportunities

Student loans are tools, not traps. They allow access to education that might otherwise be out of reach, but they require careful planning, research, and a clear understanding of costs and obligations. Approaching loans with clarity, knowing what you qualify for, how much it will cost, and what alternatives exist, turns borrowing from a risk into a calculated step toward your goals.

At the same time, no single loan should define your strategy. Combining government aid, private options, scholarships, and personal planning creates a balanced approach that keeps debt manageable and supports your studies without compromise.