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.

What You Need to Know About Your Student Loan

Q&A with Eduloan’s Financial Guru

Whether you have your heart set on a certificate, diploma or degree at one of South Africa’s finest tertiary institutions or whether you want to further your education while working, an Eduloan study loan will help you unlock your potential.

It might be a good idea to establish some basic facts about a study loan before you dive into your studies. We chat to Eduloan’s Chief Financial Officer, David Scholtz, who explains the ins-and-outs of your student loan:

Q: What are the benefits of committing to a study loan with Eduloan?

Your study loan is made to your affordability criteria, ensuring you never feel the pressures of being overburdened.  Registration fees, outstanding study fees and other additional costs associated with your studies are covered by our study loans - all you have to worry about is achieving your educational goals. Whether you are looking to increase your salary through improved qualifications, qualify for a better job position or just for personal enrichment, Eduloan will be your partner for your educational journey.
You don't need to put down a deposit and we pay the amount you owe for your studies directly to the institution and then deduct the instalments from your salary or bank account each month, which means no admin for you. Finally, you get repayment periods of 6 to 24 months.

Q: What do I need to apply for a study loan?

Applying to Eduloan is easy! If you are not full time employed, anyone who is can sponsor you. You will need to complete and sign our loan application form (you can download this information from our website) and include the following documents:

• a quotation from the educational institution reflecting your name and student number, the study program, the balance outstanding (if applicable);
• a certified copy of your South African Identity Document;
• you or your sponsor's pay slip (not older than 3 months);
• you or your sponsor's bank statements for the last 3 months. If you or your sponsor are self-employed, we require you or your sponsor's business bank statements for the last 6 months and proof of business ownership as well as you or your sponsor’s certified ID and a quote from the institution.

Once you have compiled all of your document and completed the application form, you can apply online, visit your Eduloan office on campus or giving us a call on 0860 55 55 44.

Q: How do I know how much I can afford?

Eduloan will do an affordability assessment by using the income and expenditure information provided on your loan application form, and by looking at your accounts on the Credit Bureau and a register called the National Loans Register. Based on this, Eduloan will determine whether you can afford the full loan amount you've requested, or alternatively the amount that you would qualify for. Please note that Eduloan will not grant a study loan that is more than the amount that you owe the institution, as the money is paid directly to your account at the educational institution. You can also use our Instalment Calculator as an indication to calculate how much your monthly repayments would be based on your loan requirements.

Q: What if I don’t earn a salary?

If you are not full time employed anyone can apply for a study loan on your behalf, as long as they are in full time employment and provided that the Eduloan monthly instalments does not exceed 25% (based on a one year loan) of your sponsor's monthly basic salary.

Q: What is an interest rate and how is it calculated?

As we all know by now, debt is the amount of money you have to pay back to the person or institution (such as banks or retail stores) from which you borrowed. This amount consists of two parts – the actual borrowed amount, also known as principal debt or capital amount and the interest. Interest is the compensation paid to the person or institutions who lend you the money. It is normally expressed as a percentage of the borrowed amount, e.g. 15% per year. Therefore, it is wise to repay your debt on a monthly basis and not skip payments, as this will significantly reduce the amount of interest you repay at the end of the day. This is relevant to most debt incurred, like credit cards, clothing accounts, car finance etc.

Compound interest occurs when interest is added to the principal debt or capital amount, so that from that moment on, the interest that has been added also itself earns interest. This addition of interest to the principal debt is called compounding. A bank account, for example, may have its interest compounded every year: in this case, an account with R1000 initial principal debt and 20% interest per year would have a balance of R1200 at the end of the first year, R1440 at the end of the second year, and so on.

The effective interest rate is the interest rate on your debt restated from the nominal interest rates as an interest rate with annual compound interest payable in arrears. It is used to compare the annual interest between loans with different compounding terms (daily, monthly, annually, or other). Thus, the quicker you repay your principal debt, the less your effective interest rates will be.

The more diligent you are in repaying your debt, the more controlled the interest on your debt will be. In the end, the sooner you pay off your debt, the less time there will be for the interest to accumulate.

Q: Are there any hidden costs that I should know about?

At Eduloan, there are fixed monthly installments for your study loan which includes an affordable loan origination fee and monthly administration fee, which allows you to budget more effectively. There are no hidden fees and the payment periods are flexible according to your specific needs.

Q: What does my study loan cover?

Your study loan covers a whole lot of student related necessities such as registration fees, books, tool-kits, laptops, tablets and even accommodation for the duration of your studies, as well as your study tuition itself.

Eduloan has solutions for full-time and part-time students and even offer you the opportunity to deduct your fixed monthly repayments from your salary. For more information and to speak to one of our Eduloan consultants, visit our website (www.eduloan.co.za), like our page on Facebook (www.facebook.com/EduloanSA) and follow us on Twitter (@EduloanSA).

The entrepreneurial student – ten ways to supplement your income while studying

Now has never been a better time for tertiary students to start a business.  Much more than the graduates of the past couple of decades, current students need to be prepared to find ways to supplement their incomes. Let’s face it; the cost of living continues to increase every year and the job market is a tough place to break into, making it harder for students to make ends meet while they are studying and to find a job after they’ve finished. 

Launching a business while you’re studying sets you up for success.  Here are ten business ideas you can start while you’re studying that shouldn’t cost you an arm and a leg to set up.  You can use one of these ideas or come up with your own.  Some of them may work better than others, or may not work at all, depending on your personal circumstances.   So choose wisely, and remember to adjust quickly if the business you start isn’t growing.

Before we start, let’s look at some quick tips for creating a successful student business:

* Innovation is good but it can also be overrated.  Don’t feel like you have to come up with the next big idea. The main idea is to start a simple business that generates a profit.  And that’s the main idea.

* Pick an idea that has an immediate and obvious customer base that needs or strongly wants what you plan to sell. Ask yourself if there is a demand for your product or service.

* After your initial investment, don’t put any more outside money into the business.  That’s your test for whether you’re succeeding.  The business needs to pay for itself and pay you.  Once you start, the business should generate enough for you to reinvest into the business and then begin to pay yourself.  If you see things dwindling, figure out whether you need to adjust prices, offerings, or do more marketing and selling.  Pay attention to customer inquiries and demands. They will lead you in the right direction.

* Remember the business is a great experience but it’s not the main reason you are on campus.  You are there to get a great education.  So develop discipline and time management skills that will allow you to go to class, get good results and still operate your business in your free time.

Our 10 student business ideas:

1. Tutoring service – if you’re attending university or college on a scholarship or bursary and know a required subject very well, consider start a tutoring service for local elementary or high school students who want to get into a good university or college like you.

2. Staffing service specializing in internships – start an on-campus staffing service where you help local or national businesses connect with the best students for internships and help students who want to do internships find the best opportunity.

3. Personal training service – are you athletic and into sports?  Think about starting a personal training service for students wanting to get fit and active.

4. Graphic arts and design services for presentations and papers – if you enjoy graphic arts and presentation design and you’re good at it, think about offering these services to students (and perhaps lecturers too) who want to jazz up their research and reports.

5. CV writing service – are you good at finding the best angles to present information? Start a CV writing service helping students put their experience in the best possible format and phrasing to attract interview and career opportunities.

6. Hair styling and grooming services – provide hair cuts or hair styling as a mobile hairdresser or stylist.

7. Babysitting service – if you know how to look after children and you’re responsible and reliable, starting a small au pair business could be an easy way to make extra income.

8. Bookkeeping service – if you’re studying accounting and have a love for numbers offer to keep books for a few small local businesses or find customers online.

9. Photography and video services – if you have a great eye for composing scenes and images consider starting a photography and video service. You can offer your services to students and faculty, take photos and videos of campus events and help local businesses produce and post videos online.

10. T-shirt company – really cool t-shirts just never get old and they’re the standard uniform for lots of college students. Come up with neat designs or funny sayings or create custom shirts for on-campus organisations and find someone to print the shirts for you and you’re in business!

Are you a student thinking about starting a small business? What do you think about these ideas? What are you excited about, or maybe scared about? Tell us what you think in the comments section below!