How to Successfully Take Out a Student Loan in South Africa – 6 Mistakes to AvoidNovember 14, 2019
Student loans, to some, are essential for their studies. It allows students to continue their academic life while being able to pay for their books, tuition, and other college-related expenses. However, similar to any other loan available in the market, student loans come with risks. With these significant risks, students often make mistakes that they cannot afford.
If you’re looking for a student loan, here are six mistakes that you should avoid:
1. Not Comparing Different Offers
When you’re desperate, you might choose the first offer that comes your way. If you’re fortunate, your first choice is already offering you the best student loan plan with the best interest rates. Unfortunately, that’s a very rare occurrence. When you do not compare the different available offers, you’re only losing out on the best possible rates.
That said, find as many lenders as possible and compare their difference. Also, when looking for loans, head for the federal government first. They offer the cheapest loans, so apply for those before you apply for any more expensive private loans.
2. Borrowing More than Needed
There’s no limit to how much you can borrow, but that doesn’t mean that you should go overboard. Stick to the amount required to pay off your college expenses so that you won’t have to burdened with paying off your student loan after you graduate. You can further find financial aid to cover the debt through scholarships, part-time jobs, and other sources of money.
3. Delaying Payments Unnecessarily
There is nothing wrong with postponing payments if a situation calls for it. However, you should try to avoid it as much as possible, as interest rates carry over to the next amount, and continues until you make the repayments. This means that the more you delay your repayment, the more you’re going to end up paying.
4. Not Applying for Automatic Payments
You might think that automatic payments are risky, thinking that they’ll pull money out of your pocket when you need it. However, automatic payments make sure that you’re paying on time! Also, automatic payments come with benefits such as lower interest rates, which allows you to save money in the long run.
5. Selecting the Wrong Repayment Plan
You may think that it is common sense to choose the repayment plan that requires the lowest amount of money per month. Although that will allow you to have more money for yourself, the loan will cost you more in the long run. This is because of the interest rates that will increase the total amount. Because of that, make sure first to find out the final amount.
6. Using Student Loans for Living Costs
With the money that you receive from the student loans, you may be tempted to use it for certain luxuries, such as buying yourself a new pair of flagship headphones or planning your vacation to the Bahamas. Don’t give in to this temptation, as it will only set you back.
By thoroughly planning and avoiding the mistakes we’ve listed here, you ensure that your studies will continue smoothly. Remember, the fewer mistakes you make, the better the chances of keeping your financial situation intact throughout your academic life.
If you’re in South Africa and would like to take out a personal loan for your studies, feel free to contact Hoopla Loans today! We’re happy to help.