Study this to qualify for a student loan

Apart from broadening your mind, a university or equivalent education is often the first step for many South Africans to start building a better life. It’s only natural then that so many of us are eager to get a qualification so that we can reach our potential as well as our dreams. As we all know, getting an education doesn’t come cheaply, which is why student loans are so prized.

Benefits of a student loan

A great advantage to a student loan is that the interest rate charged is much lower than a traditional loan. The interest rate on a normal personal loan can range from 10% to 24%, with most toward the higher end of the scale.

Interest on a student loan, by contrast, is Prime plus 1% or 2%. Prime is the base interest rate used by all local banks, which they in turn base on the lending rate set by the SA Reserve Bank. With Prime at 7% in 2021, this means the interest rate on a student loan could be as low as 8%.

What are the requirements?

Before you look at the financial requirements to qualify for a student loan, it’s important to understand which courses are covered by a student loan.

Rather than categorising every type of profession or qualification you could possibly get, the benchmark is courses offering NQF 5 qualifications or higher. This means any qualification presented by a SAQA-registered institution that is higher than Grade 12, which is NQF 4.

The grades for higher education qualifications are: NQF 5 – Higher Certificate; NQF 6 – Diploma; NQF 7 – Degree; NQF 8 – Honours Degree;  NQF 9 – Masters Degree; NQF 10 – Doctorate Degree.

This means you can study at a suitably qualified college that offers courses ranging from business management, law, accounting and social sciences to IT and hospitality management. NQF 5 qualifications are not restricted only to business careers, meaning it’s possible find institutions offering courses in cosmetology and beauty care, as well as many trades like plumbing, electrical and construction.

What does not qualify

This requirement that a course be a minimum of NQF 5 – whether studying full time or part-time – means that short courses do not qualify for a student loan.

These are courses that run over weeks or months rather than years. And they’re not always registered with the qualification authority, even though they’re often important stepping stones for those of us studying while working.

What are the options?

That doesn’t mean you can’t get help to afford a short course. You might not qualify for a student loan, but a personal loan is still perfectly suited to helping you get the education you deserve.

The benefits of a personal loan rather than a student loan is that you’re not restricted in how you spend the money. Student loans are far more limited in what you can pay for with the loan money.

With financing solutions like a student or personal loan to get you on the education fast-track, you truly have to power to change your world.