Student loan: all you need to know.
According to one study, for 6 out of 10 students, the cost of student life is a hindrance in the choice of orientation. This applies to the price of schooling, to the amount of rents more or less high according to the cities… More than 40% of students are thinking of moving to a student loan to fund their education. But before embarking on it, it is important to learn well.
1. What is the student loan?
Like a traditional personal loan, the student loan is a funding for those wishing to attend university training and need financial support to complete their curriculum. Students will be able to use this money for the duration of their loan, as they please. For example, they will be able to pay their rent, their expenses, finance University equipment and their recurring expenses. The difference with the traditional personal loan is that the student loan will be refunded only at the end of their studies, when they will have started in the working life. This is obviously a specific loan, the duration of which can be up to 10 years. On the other hand, it is good to know that banks are taking risks by awarding student loans. To avoid non-reimbursement, they prefer the trainings of the grandes écoles, which guarantee opportunities.
2. Choosing the right bank
Some schools are partnering with banks. In this case, the student will be able to benefit from special conditions and preferential rates. In case your school has no financial partner, you can play the competition: banks can be in demand, and in this case you have room for manoeuvre to negotiate the terms of your loan.
3. Well calculate the amount you will need
Before you ask a Bank for a student loan, it is important to set an amount. By planning your monthly fixed expenses, such as rent, groceries, expenses, University equipment… This will prevent you from 2 cases of frequent and pesky figures. First of all, if you have borrowed too much, you may be able to pay off your loan. Moreover, if you have not borrowed enough, you may have to face financial difficulties during your studies.
4. Don't start without a guarantor!
If you are present in front of a banker without having any guarantor, you can be sure that the student loan will not be granted to you. Indeed, the risks of non-repayment are high for banks. So you can ask your parents to vouch for you. Otherwise, the State can play this role if you are under 28 years of age and your loan does not exceed 15 000 €. Between 3500 and 4000 students have already used the guarantee offered by the State. However, this warranty requires a borrowing cost of approximately €500.