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.
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).
