The study period is the time of study: not only the subjects covered by the chosen field, but also adulthood. From now on, parents are no longer responsible for refilling the fridge, everyday shopping and paying bills – it becomes our task. The class schedule does not always give you the opportunity to take on part-time work to start living on your own. Sometimes a student loan is the only solution. How can you get it? What are the advantages? Read
Student loan is one of the cheapest loans available on the market. What’s more, it is also completely safe. The student does not belong to the group of typical bank customers, most often he has no creditworthiness. That is why such help is sometimes the only chance to become independent and start building your own capital. It is not said that borrowed money has to be spent on daily needs – it may as well be put aside or the needs invested – it may as well be put aside or invested.
The legal basis for student loans is the Act of 17 July 1998 on loans and student loans, The Act of 27 July 2005 – Law on Higher Education (Journal of Laws No. 164, item 1365, as amended) and the Ordinance of the Minister of Science and Higher Education of July 5, 2016. Student loans, as the name might suggest, are granted for the duration of study (no longer than 6 years), in the case of doctoral students it covers an additional 4 years. Money is paid out during the academic year (i.e. no longer than 10 months of the year), but is suspended if the student is on dean’s leave.
Why is it worth using a student loan?
First, because of the extremely low interest rate. NBP data say 0.875% per annum. Student loans are also a very flexible banking product, because we can decide on the amount of monthly tranches (400, 600, 800 or 1000 PLN) depending on the needs. After graduation, we have 2 years to start paying off the debt – the bank guarantees that it will not charge any interest during this time, because it is covered by BGK (Bank Gospodarstwa Krajowego) from the Student Loans and Funds. The number of loan repayment installments is twice the installments paid. In practice, this means that if the loan was granted to us and was paid out for 5 years, we will pay it back 10 years. Of course, it is possible to settle your debts in advance, but few decide.
If we do not start or stop paying the debts due to, for example, difficult financial situation, we can apply to the bank for a reduction in installments, for suspension of repayment and even for loan cancellation. We can really help ourselves with the loan settlement, while we are still learning.
What about student loan interest?
The repayment of interest begins at the same time as the repayment of the loan. Their amount is half of the rediscount rate, which is 1.75% (as at 26/03/2019). There is no denying that this is a very competitive offer compared to the proposals we receive when applying for a consumer loan.
Student loan – who can apply for it?
Credit applications can be submitted by both public and private university students studying day, extramural or evening. In addition, they cannot be at least 25 years old, unless they are doctoral students. They have time to complete the formalities between July and October each year. A loan application is submitted both when we are just taking part in the recruitment process and during their studies – at the 1st, 2nd or 3rd degree. Due to the fact that the idea of such a loan is to help students from less affluent families, the Minister of Science and Higher Education sets the maximum amount of monthly income per person in the student’s family and it is the student who decides to grant the loan. The designated income is not determined once and for all, and after a year it can be changed (in recent years the limit was income in the amount of PLN 2,500 net per family member).
A document confirming that in our family this limit is not crossed, we must submit to a bank branch. It should be provided with a certificate of participation in recruitment or student status. Combining and attempting to circumvent the topic does not make any sense, because payments in the next semesters of study are continued only if we submit a valid student ID in the bank. We will not hide the fact that we gave up further education or that we did not pass the semester on time. Payments will resume as soon as we regain student status and we have a valid document that confirms this.
Student loan guarantee
The basic amount is PLN 600 / month, but there is also a reduced (PLN 400) or increased (PLN 800 or 1000) installment. You can also use the option of changing the amount of a single tranche, even if you already have a loan and we have received several transfers.
Due to the fact that students usually do not have credit collateral, which would be recommended to a bank in the case of typical clients, they are required to have a guarantor. Most often they are parents and they, in case of problems with paying off the debt, will have to settle them. What at the moment when such a solution is impossible? The student has the right to apply for a surety from Bank Gospodarstwa Krajowego or the Agency for Restructuring and Modernization of Agriculture. In both cases, the amount of the guarantee depends on the income per family member – both in families residing in cities and those from rural areas. Only when the guarantee requirement is met, the student (borrower) can decide on the amount of monthly installments, which we have already mentioned above.
In what bank to apply for a student loan?
Banks earn so little from student loans that only a few of them have such a product on offer. Currently, it is Bank Pekao SA, PKO BP, Bank Polskiej Spółdzielczości SA (together with associated cooperative banks) and SGB-Bank SA (together with associated cooperative banks). It is hardly surprising that the institution is not interested in a student loan. The rules of its functioning are set by the state, which is primarily concerned with the good of the student. This is done at the expense of profits for the bank, for which the only advantage of this situation is having the customer for at least a few years and the chance to tempt him with another product after paying the liabilities.
Student loan for current expenses or reasonable investments
We warn against spending nonchalant money, because although the student loan interest rate is low, we will not run away from having to pay back the debt. The regulations do not regulate what we can allocate these funds to, but it is worth thinking about it beforehand. Let us remember that a student loan not only facilitates everyday functioning, but also gives you the opportunity to invest in yourself or your development. If you are not interested in saving on the deposit or investing in the stock market, let’s take care of your qualifications. We will pay for foreign trips, e.g. from the Erasmus program, as well as courses and trainings with the student loan money. All these activities will certainly be appreciated by the potential employer. Practical skills will always be more valuable than acquired theoretical knowledge. It is only up to us how we will use the potential of such a financial product as a student loan.