What is the role of a sponsor? (Infographic)

4 Reasons why it is a good idea to pay off your study loan by the time you graduate

At Eduloan we offer you a range of study loan solution to ensure that you tuition, accommodation, textbooks, a laptop and tablet and even your study related equipment. Our study loan repayments are generally made over a period of 10, 16 or 22 months. At Eduloan we believe that it is better for students to make arrangements with a sponsor who is working so that your loan and interest can be paid back by the time you start working, thereby freeing you of extended periods of debt, high interest rates and compound interest. We have five good reasons why it is a good idea to pay off your loan before you graduate!

No Hidden Fees

Our loans have fixed repayments – making it easy for you to budget since there won’t be surprise increases.

Make sure you start your career fresh… and debt free

Because you’re starting out a new career and making a fresh start, we want you to have to focus on building your skills and experience without being distracted by the stress of budgeting for your study loan.

Other debt

When you start your working-life, you have other cost to consider like the cost of housing and transport. Whether you are saving for a house or renting an apartment or a room in a house-share, or whether you are saving up for your own pair of wheels – the additional stress of a study loan repayment can  mean that you might take a little longer to get your dream home or wheels.

 

Are you interested in affordable study loan from Eduloan? All you need to apply are the following 4 documents:

You can apply online now or give us a call on 0860 55 55 44. You can also SMS ‘EDU’ to 32150 and we’ll call you back!

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 [L1]Linked to http://www.eduloan.co.za/loans

Post-Study Financial Freedom – Why Is It So Important?

Whether you are thinking about applying for a study loan, in the process of your loan application or whether you have already committed to a study loan, the monthly repayments would most definitely play a role in your budgeting and planning. At Eduloan we ensure that your study loan is paid off by the time you complete your studies, but why is this so important?

Lowering Your Debt To Income Ratio (making sure your debt is as small as possible in relation to your income and does not have a large effect on your budget)

When you start working, it is important to plan your budget according to your income (how much you earn). When your study loan is paid off, you have one less debt to worry about when you allocate money to your living costs.

Having some extra money available at the end of the month

It is always a good idea to save for emergencies. If your study loan is paid off by the time you complete your studies, you can start saving money for those emergencies, a new car, a house and other expenses.

Planning for the future

It is very important to set yourself financial goals. A study loan is often the first financial commitment that many young people make. After your studies, you might want to buy a car, a house, take out annuities, set money aside for retirement and preparing for your own children’s futures could be some of the goals that you might have to set yourself.

By paying off your study loan by the time you complete your studies, you free yourself from that financial commitment. You can calculate your budget with our budget calculator and then view our quick-reference table to see what your installments will be. Visit www.eduloan.co.za today and contact us to find out how you can benefit from our study loan options.

Laughing All The Way To The Bank

By David Scholtz - Chief Financial Officer at Eduloan

Few of us can afford tertiary studies without a loan. And, let’s face it, to invest in your future by securing a study loan can be an excellent decision as long as you understand exactly what the loan entails and where it will take you.

Before you even consider a loan, think long and hard about your future career path and how your studies will get you there. It’s no use choosing a career, studying for three or four years and then you can’t find work.

Proper career planning, finding your niche in a job market where critical skills are key in finding employment and good management of your finances all play a crucial role in your or your child’s future.

It is a sad reality that South Africans are generally ignorant about personal finance, and many live by the habit of spending now and paying later. Currently the ratio of debt to disposable income of households is around 76%, it tells you what percentage of consumers’monthly gross income goes toward paying off debts. About 47% of credit active consumers are two months in arrears or more. About 14% of these consumers have judgements or administration orders against them. A fifth of credit-active consumers are three months or more in arrears. This paints a picture of a nation overextending itself.

There are several ways of getting and staying out of debt.

The first is education about managing your personal finances and the cost of debt.

People who know the meaning of debt, a loan and saving money- and who understand the impact of these - are the people who can plan their lives and ensure a better future for themselves and their dependants.

Debt consolidation is another popular way of alleviating the burden of over-indebtedness.

While this may be a good idea for some, it can result in consumers being locked in to paying off their debts for longer periods and effectively at higher interest rates and fees.

 The main appeal of debt consolidation is convenience.

How does it work? Instead of a consumer paying off a number of different loans every month, which might have different interest rates, the consumer can just apply for one big loan, pay off all the other debts they have, and then be left with making a single payment towards that loan every month. The repayments are usually lower instalments, giving them more disposable income, which at first glance seems very attractive.

What most people are not aware of is that debt consolidation locks you in. You still end up owing the same amount of money, but pay your debts off over a longer period and not always at the lowest available interest rates. This means you might end up paying more in the long run. All that is happening is that the repayment of the debt is delayed from the immediate to long-term.

The best option remains to pay off all debt as soon as possible, and then start saving the amounts that you formerly paid over to creditors.

The impact of over-indebtedness on the financing of study loans is considerable. All credit providers look at certain criteria. The credit providing environment is regulated and interest rates are determined based on creditworthiness which includes both affordability and behavioural history. First they will assess the affordability of the commitment to the consumer; they will look at the regular expenses, the disposable income, repayment track record and credit history. The industry is regulated and there are strict rules in place. If you are not creditworthy, it will prove difficult to get a loan.

Eduloan’s model is slightly different to that of micro lenders or banks. When looking at credit our lending is to focus more on salary deduction, whereby we collect the amounts owed via the employer and not the individual’s bank account. The funds are also disbursed directly to the educational institution.

Although Eduloan’s method of granting loans falls under unsecured lending, we have the ability to collect before the person gets his take home salary, thereby protecting our clients from defaulting as he doesn’t have to still pay his loan back from the take home portion.

We also educate clients about their loans. It is all about understanding the value of the loan, how the loan is structured and, if denied, explaining why the loan was denied. We explain exactly how Eduloan loans work in terms of the terms and installments. We are very transparent and there are no hidden costs. The interest rate is fixed, and the installments remain the same for the period that clients sign for.

Here is our advice to parents who want to be able to finance their children’s  education:

•         Live within your means and save
•         Don't spend what you don’t have.
•         You need a savings buffer for emergencies, or for when interest rates go up.
•         Try and save as often as much as possible.
•         Don't buy on credit, especially for funding living expenses and holidays.
•         Have a plan – save for your children’s or your own education, or invest elsewhere.

Mindsets about financial literacy need to be changed, and not only of those who want to secure their future. Corporate South Africa and other employers have a responsibility too. The latter should consider offering financial literacy courses for their personnel, who can then teach the basics to their children at home.

When you look at debt, you need to understand that not all debt is bad, specifically debt that will contribute to your financial well being. Educational debt falls into this category as it gives you the opportunity to invest in your own or your children’s education and will go a long way in setting up the foundation for a debt free future as education is key in improving your income earning potential.

ABOUT EDULOAN

Eduloan is a leading education finance specialist operating in Southern Africa. Since its inception in 1996, Eduloan has provided more than 7200 000 study loans valued at R3.7-billion and continues to help thousands across Africa unlock their true potential. Currently, Eduloan approves between 40 000 and 50 000 loans annually to students, a significant proportion of them working professionals.

Eduloan’s loan offerings include repayment options at extremely affordable, fixed-interest rates, for the duration of the loan period. 

Study fees are paid by Eduloan directly to the institution, taking the administrative burden away from the student/corporate institution.  Loans can be paid back either through a salary deduction or a debit order.

For more information, call Eduloan’s Client Services Department on 0860-55-55-44 or visit www.eduloan.co.za. Follow us on Twitter/EduloanSA and Facebook/EduloanSA.