Higher education is nowadays almost the basis of future success. Universities are introducing new fields of study to their offer, thus attracting crowds of candidates. At the same time, banks and cooperative savings and credit unions tempt with attractive financial support during their studies. What is a student loan? Who is it addressed to and what changes were introduced in 2019?
Student loan is not so bad
The first student loans were launched in 1998, and their popularity is increasing every year. This is not surprising. Applicants for such a loan have preferential terms that are much more favorable than those of an ordinary borrower.
Low interest rates, the possibility of canceling even half of the debt, convenient repayment two years after graduation are just a few advantages of a student loan. However, many people are quite skeptical about it, because in the end it is a “loan”, ie a commitment for several or even several years. However, it should be remembered that despite many years of debt, such a commitment builds our creditworthiness, which may prove invaluable in the future.
Rules for obtaining a student loan
In January 2019, certain changes regarding student loans entered into force.
Under the new system, the conditions are as follows:
- 1. People up to 30 years of age in the case of undergraduate and graduate studies and up to 35 years of age in the case of doctoral students (if they started studying before the age of 25) may apply for a loan.
- 2. Net income per family member cannot exceed 2500 dollars.
- 3. The tranches shall be paid for 10 months of the year (except for the holiday period).
- 4. There are four tranches to choose from: $ 400, $ 600, $ 800 or $ 1,000.
- 5. A collateral for the loan is required, which is specified by the bank or savings and credit union.
- 6. The loan is paid for a maximum of 6 years, and in the case of doctoral students – 4 years.
- 7. You can apply for a loan at any time, and not as before – before the start of the new academic year.
- 8. Very low interest rate that applies during the repayment period of the loan installments and amounts to half of the NBP rediscount rate. Currently it is 1.75% (data for January 2019).
- 9. Debt repayment begins two years after graduation and the number of installments is twice the tranches paid.
- 10. It is possible to write off the debt by up to half if the borrower has graduated from the top percentage.
- 11. Possibility to write off the whole debt if the borrower is in a difficult life situation.
Current student loan offer
An application for a student loan is considered within 30 days of its submission. Currently, such loans can be granted by the following financial institutions:
- UniBersal Bank
- Lyfpoint Bank
- YesYes bank
- OneEquity Bank
Student loan is not only supported by its universality or low interest rate. Preferential conditions also mean that for the entire loan period and two years after graduation, it is the state that repays the interest due on the debt. Only after this period this obligation passes to the borrower.
Is it worth applying for a student loan?
Yes, and for two main reasons. First of all, it is a kind of financial support regardless of whether the student will allocate tranches for payment of tuition fees or maintenance. Secondly, the repayment of such a commitment will positively affect the borrower’s scoring, thus making it easier for him to receive another loan in the future.
So if for some reason a student needs such cash, it is worth submitting an application for a student loan, especially since we will not receive such preferential conditions later.