A student loan with an interest rate subsidy from the state budget was introduced to the market over 20 years ago. It was created as part of the extension of access to higher education. These loans are granted by commercial banks, which allows students to be materially supported.
Student loans are different from other loans. It is much cheaper than consumer credit offered by banks. The student loan interest rate depends on the so-called the rediscount rate of the bills of exchange, which is set by the Monetary Policy Council. The interest charged to the student is half the amount of that rate. The remaining part of interest is covered by the state budget.
If you have trouble finding a source of income because your studies do not allow you to take up an additional job, a student loan may be the perfect solution for you. It is a chance to provide money for current expenses during studies. Parents are not always able to finance us and it is usually impossible to work in our free time. Student loan is therefore a chance to provide financial freedom, which is a priority in the life of every young person. He also teaches budget management in adulthood.
A student loan does not have to be for current expenses. Thanks to the fact that you don’t have to show the bank what you spend your money on, you can, for example, invest your monthly installments and earn extra profit from them.
Money obtained from the loan can also cover a language course or industry training. Thanks to them you can bet on the quality of education, which usually costs more. Higher level of language skills, ability to use advanced programs, more knowledge in the field that interests you – all this improves your position on the labor market.
The condition for obtaining a student loan is student status confirmed by a valid student or doctoral ID. If you are abroad, you must provide a certificate of study.
The condition of concluding the contract is also meeting a specific income criterion. In the 2018/2019 academic year, the maximum income entitling to a loan is USD 2,500 net per family member. Importantly, students living in a rural area can apply for a guarantee for the Agency for Restructuring and Modernization of Agriculture.
Before granting the loan, the bank assesses the loan repayment security for the selected installment (it can be USD 400, USD 600, USD 800 or USD 1000). If the assessment for the amount you request is negative, the bank will reassess it – this time for lower installments.During the term of the contract, you can submit an application for a change in the monthly installment amount.
Student loan is granted for the period of study and paid out for a maximum of 6 years. In the case of doctoral studies, they are 4 years. The loan tranches are paid for 10 months in each academic year.
As a borrower, you must notify the bank of any event that will affect the extension of the loan period, eg failure to complete a year of study, vacation or suspension. You should also notify the bank if you have been removed from the student list, whether you have taken the diploma examination or obtained a degree.
If you decide to take out a student loan, the loan repayment begins two years after graduation.The number of loan repayment installments is twice the number of loan installments paid. Importantly, in the event of a difficult life situation or loss of a permanent source of income, you can apply to the bank for suspension of loan repayment for a maximum of 12 months.
Student loan makes it easier to start adulthood. Especially for those who are unable to financially manage to maintain themselves during their studies. After some time, it may happen that apart from the student loan, you will also have to pay back other loan obligations. Your financial liquidity may gradually deteriorate.
In this situation, student loan consolidation will work. It is a combination of loans, including student loans, into one commitment. Thanks to this, we harmonize repayment terms and conditions. We no longer have to contact several banks and remember about different repayment dates. The repayment is adapted to our current financial situation.