Back to School is an exciting period for many families. While prominence is typically given to high school learners and children starting foundational phases, professionals also use this time to enhance their skills through further education and training.
Chief Executive of FNB Consumer, Christoph Nieuwoudt says primarily, a new school year has financial implications as families have to juggle expenses like registration fees, uniforms, books, travel and accommodation in some cases. Families that are not in a financial position to fund education expenses often rely on unsecured credit to supplement their budgets. While credit can offer timely relief at this time of the year, it’s important for parents and guardians to do their homework before signing-up.
Nieuwoudt explains the various forms of unsecured credit to help you choose the right solution for your needs:
Student Loan - A Student Loan can be used to fund studies from any registered tertiary institution. The parent or guardian contracts with the bank and is liable for paying the loan. The loan is subject to credit and affordability assessments, which determines how much you qualify for, but has huge benefit for customers as capital repayment only starts on completion of studies and interest rates are generally lower to promote this form of credit.
Personal Loan – For most people, a personal loan is a natural starting point to access credit from a bank as it doesn’t require any security and can have relatively low monthly repayments of a fixed instalment amount. While personal loans are relatively accessible if you qualify, you should weigh the pros and cons when considering a loan which has a longer repayment term (e.g. longer than 60 months) as the total cost of credit can become high.