Yolandi Kruger, National Director of Business Development, CTU Training Solutions.
According to Johan Wiggins, CEO and co-founder of Student Hero, there are many reasons why it may be better for students to consider funding their purchase of education, instead of paying cash in advance.
“The major reason for funding your education is it enables you to definitely save your valuable savings for any rainy day, while using the resources of the funding provider to cover the academic institution. If you have to make an application for financing from necessity, the extended repayment term linked to the financing can significantly lessen the payment per month in accordance with what is comfortable for the particular finances.
However, finding funding for your studies is not even necessarily from necessity. It might just be more comfortable for an individual to pay for a lower installment to prevent sacrificing an excessive amount of their comfort. “We've all heard the stories of scholars surviving on noodles and bread for 2 minutes. This doesn't necessarily need to be the situation with the financing options available today.
To determine if funding is the right choice for the student's situation, Wiggins recommends weighing the expense associated with funding or funding the amount against the increased earning potential induced through the education. “Whatever the main reason, it is crucial that a student knows their options and understands the eligibility criteria, conditions and costs associated with different education funding providers.”
Student finance is different from other financial products like property and auto finance, and it has different cost implications. Wiggins explains, “Education funding providers recognize how important it is to purchase education, which is reflected in the manner student funding is priced and reimbursed.
Student financing is priced at an interest rate ranging from prime to prime plus seven, which is a relatively a low interest rate rate compared to other financial products. However, the most unique feature of student financing is that the repayment of the principal amount requested may, in some instances, be deferred before the student completes his studies.
“This repayment structure gives the student time for you to start earning income before beginning with principal repayments,” he states. “Student finance is easily the most affordable kind of finance provided by South African finance providers. ”
There are, however, certain eligibility criteria for obtaining student funding.
A finance provider will look at a couple of things in determining whether a job candidate is eligible for funding: these are the applicant's affordability and their credit score. Simply put, the company may wish to establish that the applicant can afford the monthly funding installments.
Affordability is calculated by deducting fixed expenses, for example rent, insurance premiums, along with other credit commitments from your net income. The surplus should be greater than the financial tranche.
“Funders also element in your additional income, for example commission, bonus, or rental income, and even riding time income from the second sponsor as part of the affordability calculation. . For this reason, you should inform the finance provider from the availability of additional income or perhaps a second family income.
He points out that the perfect credit score is not necessarily necessary to qualify for education funding. “Different suppliers each have a distinctive qualification criterion, more flexible than others. “
Students who are unsure of their credit score or affordability should contact an education finance provider for prequalification, then they are able to assess your options. Wiggins says, “The most important thing to bear in mind for first-time students or their financial caregivers is that the student does not need to be an enrolled student before committing to a service provider. education funding. “
Most providers offer free advice to students who wish to make an application for funding for that balance of the current fees or to fund additional many years of study, but they are unsure whether they can use for funding.
“Students who would like to make an application for funding for his or her studies – or determine whether they are eligible – can ask their student advisor for help or apply through our website,” says Yolandi Kruger, National Business Development Manager at CTU Training. Solutions.