Student loans

Student loans are a very common option for those who would like to pursue a postgraduate degree but don’t have sufficient funding of their own. However, unlike scholarships or studentships, student loans are tied to strict loan repayment policies.

What kind of financial burden do I have to expect when taking out a student loan?

Some of you will be sceptical about student loans. While it is very common among US students to borrow money for their education, German students tend to be frightened by the financial burden. As you can see, being prepared to take out a loan is also a cultural predisposition. Anyway, for some of you, taking out a student loan may be the only way to finance a postgraduate degree. In any case, you will have to repay both the loan and the interest on it. To get a loan, you first need to be deemed credit worthy. The interest rate and the time until the loan repayment period begins both depend on the lending institution and the country. After you have proven your ability to handle the added financial responsibility, the bank will make an offer. In the UK, the loan repayment period often starts right after graduation. In the Netherlands you will not have to start paying back your loans until two years after graduation. Very conveniently, German students who received financial aid from the government only have to pay back half of that aid; the other half is given as a grant! Repayment in Germany starts five years after the end of the funding period.

Who offers student loans?

A lot of banks provide loans. It is important, however, to choose a bank that meets your circumstances, such as your income, your credit rating and your securities. The Polish Bank BGK offers special student loans, for example. The German KFW Bank provides loans to domestic as well as international EU students, while in Spain it is barely possible to apply for a student loan at a Spanish bank. The Finnish system, by contrast, requires that borrowers have lived in Finland two years prior to the beginning of their studies in order to be eligible for a loan.

To put it in a nutshell…

Student loans vary widely in terms of interest rates, loan repayment plans and many other aspects. Therefore, it is highly important to collect extensive information. Student loans are available in every country, but keep in mind that you may not be credit worthy due to your citizenship, for example.