Demand for the FNB student loan rose dramatically by 116% in the six months ending December 2022, the bank revealed in a statement this week.
The increased pay-outs could be attributed to FNB’s efforts to make student loans accessible through the FNB App.
“The cost of education has increased significantly over the years, making it difficult for many to achieve their educational goals and career aspirations,” Business Solutions Head at FNB Loans Amika Maharaj said.
“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.”
FNB student loan requirements
To qualify for an FNB student loan, the person that borrows the money (principal debtor) needs to earn a minimum income of R3,000 per month, the bank said.
“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,” it added.
Also among the requirements is that the applicant and the student need to have South African IDs. The student must also be registered with a recognised tertiary institution. If the applicant is not an FNB customer, they must also provide their latest three months’ payslip or bank statement (six months’ bank statement and ITA34 for self-employed customers) and proof of residence.
Applicants can get a maximum loan amount of R300,000 each year, with interest rates starting as low as Prime less 0.50%. They can use the loans for 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,” FNB said.
The interest on FNB student loans is relatively lower compared to personal loans or credit cards. It is therefore important to choose the right loan and to use it for what is intended for. For instance, do not use a student loan to fund a lavish lifestyle.
“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,” Maharaj advised loan beneficiaries.
“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.”