Student loan

As the saying goes, apprenticeship years are not years of plenty. What applies to vocational training also applies to obtaining a university degree. Often under much more demanding conditions, since the wide-ranging subject matter requires very intensive studies. This often leaves little time for work.

But where is the money for living expenses supposed to come from? The BAföG office does not always pay the amounts actually needed, and not all parents can be expected to support all of their children. Most of the time, a student loan is the only thing that will help the student out of the financial predicament. But the offers are as varied as they are hard to oversee. Only those who choose wisely will gain an advantage.

What options are there for a student loan?

Only in recent years has it become an issue for banks to support students on their way with the help of a student loan. The previous principle that an applicant had to provide their own collateral has been abandoned for student loans. It is clear in these cases that the person in need has neither collateral nor assets. If they had such means, they would not need to request a loan to cover their monthly living expenses.

Nevertheless, the applicant offers a far more lucrative value to the financial institutions: it lies in the applicant's education and the student's intellectual potential. The bank supports their years of training and thus takes part in the advancement that often leads to law firms, executive positions or other well-paid jobs.

For this purpose, the student is offered a student loan tailored to them. The bank transfers a monthly amount of a few hundred euros to their account. Only after completing their studies does the borrower of a student loan repay the sum plus an agreed interest rate to the bank.

The advantages of a student loan

A loan like this gives the student the chance to focus entirely on their studies. Especially during exam periods it can be necessary to devote all of one's energy to studying. Someone who had to work on the side would no longer have the time needed for their workload.

The bank also benefits from this, since it can be reasonably sure that nothing stands in the way of the borrower's education and that they can concentrate on what really matters.

Repayment of a student loan usually begins only two years after the last monthly disbursement. In some cases, repayment can also be postponed until the former student has taken up a permanent position with a corresponding salary.

Banks are therefore very flexible in designing the contract and can often present the applicant with a truly tailored loan. That is the advantage of a student loan for both sides. The education can be completed without problems, and in many cases the borrower moves into a well-paid position.

More information on financing a degree can be found here.