Customers are using student loans to pursue educational aspirations
FNB has seen increased demand for student loans, with pay-outs rising by 116% in the six months ending December 2022. The increased pay-outs also follow the bank’s efforts to make student loans accessible via the FNB App.
Amika Maharaj, Business Solutions Head at FNB Loans says, “The cost of education has increased significantly over the years, making it difficult for many to achieve their educational goals and career aspirations. The introduction of student loans on the FNB App, has allowed us to provide solutions and help our customers overcome their financial challenges and unlock funds to future-proof themselves in this ever-changing climate. The application process has proven to be easy, safe, and convenient for our customers with great interest since the launch.”
To qualify for a student loan, the person that borrows the money (principal debtor) needs to earn a minimum income of R3 000 per month. Should the individual be a part-time student or be employed full time with the goal of furthering their studies, they are able to apply for the loan as the principal debtor (given that they meet the R3 000 minimum income requirement). Alternatively, a parent, family member or any other sponsor can apply for the loan. All applications are subject to a credit and affordability assessment.
The bank offers a maximum loan amount of R300 000 each year and highly competitive interest rates starting as low as Prime less 0.50%. The loan amount could cover expenses such as tuition fees, accommodation, textbooks, and other study-related expenses. The principal debtor enjoys the benefit of paying only interest and fees for a 12-month period, and the repayment due thereafter consists of interest, fees, and capital.
It is important for customers to remember that the interest on the student loan is relatively lower when compared to a personal loan or credit cards. Always choose the right loan and use it for what is intended for. Don’t use a student loan to fund a lifestyle but to strive for a better future.
“We encourage customers to pay a little extra on their agreed monthly repayment of the student loan where possible. This helps to save on interest and fees and decrease the total cost of credit. There are zero penalty fees for paying-off the student loan early. Also remember that if additional funding is required for the next year of study, a new application needs to be submitted so only borrow the amount that you need and keep expenses low together with a healthy credit profile,” concludes Maharaj.