Anyone who decides to start studying after graduation also faces the question of how to finance this exciting time. Parents cannot always step in, and paying for a living and studying through a part-time job can be challenging. A student loan then seems to be the best choice. If you want to borrow money for your studies, you should carefully check the requirements, because every loan wants to be repaid at some point. So what should students consider before paying for their studies with borrowed money?
Who is a student loan suitable for?
Many banks in Austria have issued loans specifically for students to make it easier for young people to do their dream job and to create the conditions for this. If you want to become a doctor, lawyer or engineer, you need a degree, and a bachelor or master is also a prerequisite for later promotion in many other professions. That is why attractive offers with generous repayment terms and low interest rates have been brought onto the market. They should make it easier for young people to take out a loan for their studies. This is especially true if no financial support is possible from the parental home or if taking on a part-time job is not an option during the study period.
What are the advantages of a student loan?
The biggest plus of a student loan is, of course, that you can fully concentrate on your studies. There is little need to worry about how to pay for living expenses, tuition fees, and additional expenses for studying. This makes it possible to complete the degree as quickly as possible and start working. Another advantage is that student loans can be organized quite flexibly. They are cheap and most banks give a generous timeframe for repayment. Repayment often only begins when you have completed your studies and have a regular income. This means that you are not unnecessarily burdened financially during your studies.
What are the disadvantages of a student loan?
A student loan must be repaid. Even if the financing bank grants a long margin until repayment begins, the student must keep in mind that this payment obligation will eventually hit them. Often, the start of repayment can be agreed at the time when the student enters the professional life permanently and signs a fixed employment contract. From this point on, he is obliged to pay a fixed loan installment every month, although he may then have other financial priorities. Many young students want to rent their own apartment, buy an apartment or car, and enjoy life after starting their professional life. However, this is only possible if you have reached a certain salary level. This is not a matter of course for a young professional. In this situation, there is also the credit installment, which strains the budget for several years. You have to know and accept this disadvantage before deciding on student loans.
Which arguments have to be considered when deciding?
Taking into account the advantages and disadvantages of a student loan, the following argument should also be considered. If there are no other financial options to finance a degree, a student loan is a sensible alternative. If parents cannot support and you want to concentrate on your studies, there may be a combination of a student loan and a manageable part-time job. Although a student loan is of course an additional financial obligation, banks in Austria are very responsible when it comes to approval. Therefore, these loans are only granted for a certain amount. The student can make a living from this, but does not have to fear that he will be in permanent debt. Since it is ultimately an important investment in your own training, it is usually worth taking out this loan. It is then important to carefully examine the offers in order to find the best conditions.
How do you determine loan requirements?
Before you sign the loan agreement, you need to find out the exact amount of the loan. Most of the time, a loan should cover the cost of living and the cost of studying. A list of the costs incurred per month is useful in order to first get an overview of the money required and to check later that you do not spend more than you have at your disposal. Big jumps and expensive vacations are certainly not possible in this phase, but this is also not absolutely necessary for a student.
When calculating the cost of living, one should think about expenses for rent and food, for ancillary costs such as electricity and internet, for mobile phones and clothing. The cost of studying includes tuition fees, if applicable, but also work materials or expenses for books and a computer. These expenses are calculated per month and then summed up for the number of months that the study takes. This is how you get the amount you should finance.
Which degree programs are particularly often financed?
If you look at the demand for student loans in Austria, it quickly becomes clear that especially the Bachelor’s degree is gladly financed. The background is easy to understand: the duration of the study is manageable at just 36 months. This means that the amount of the loan can also be absorbed. If you want to finance your bachelor’s degree with a loan, you can hope for favorable interest rates during your degree and after graduation. Here, student loans differ somewhat from classic installment loans, which a student probably does not get due to the lack of regular income. Student loans are particularly suitable for graduates of a bachelor’s degree, and they are in high demand accordingly.
How is a student loan paid out?
The Austrian banks have provided additional security for a student loan: it is usually paid out in monthly installments, and the full amount is rarely paid out. In this way, the bank ensures that the student does not spend the money on other things, but uses it permanently for his living and his education. At the same time, you learn how to divide up your money and handle it responsibly. Interest is not requested during this time, it only accrues from the agreed point in time. Student loans differ from other types of funding in this regard too. Because no interest or principal is paid during the course, the student has the entire payment rate freely available month after month.
What are the requirements for the student loan?
If you want to apply for a loan to study, you have to meet certain conditions. The applicant must be between 18 and 30 years old. He must be enrolled at a recognized university. The last monthly installment is paid until the 14th semester or until the first degree has been completed. If you want, you can still do a master’s degree after the bachelor’s degree, due to the long term of the loan, the master’s degree is covered.
By the way, many banks use flexible student loans as advertising media. They enable very individual financing in order to bind the students to themselves during their studies. Upon entering professional life, the formerly satisfied student becomes a professional, who will in future handle all financial transactions through the reliable and customer-friendly banking partner. However, it is important that you stick to the agreed formalities even after the loan approval. The student usually has to prove during the payment phase that his studies are still ongoing. For this, the certificates of the existing matriculation are to be presented. If you forget that, you risk getting no money within a short time.
Which banks offer student loans?
The range of Austrian student loans is large. If you are interested, you should compare the conditions to find the optimal provider. For example, the loans from the savings banks or Bank Austria are attractive. The Lite Lender banks also grant good loans. A try is also worthwhile at Santander Bank, a popular tip for student loans with attractive conditions among students. Interest is of course of great importance, but the repayment-free period and the duration of the possible repayment as well as the maximum approved loan amount should definitely be taken into account in the comparison.
What is the study grant?
For Austrian students, the study allowance is an alternative to the classic student loan. The study grant is awarded through the Federal Ministry of Science, Research and Economy (BMWFW). Only certain people are entitled to study grants, among other things, age and individual social and personal situation have an impact on whether they receive study grants. Although the review and application process is relatively complex, you should find out exactly whether there is a way to take advantage of this funding. The study allowance is granted depending, among other things, on whether the applicant has their own income, whether they have assets or whether the income of the parents reaches a certain level. Students with an Austrian passport and EU citizens or stateless persons who are on an equal footing are entitled to the study allowance. Study grants are only granted if the financial need is proven. Therefore, the family situation is examined extensively.
These include, for example, family size, the income of parents and students themselves, the age and progress of the course. If the grant is granted, proof must be provided regularly during the disbursement to prove that the entitlement remains and that you are studying successfully. The monthly allowance for studying is $ 475 if the place of study is at the parents’ place of residence. If the place of residence and the place of study differ, $ 679 per month will be paid. A student with a child receives a further grant of 112 USD per month. You can check online whether you are entitled to study grants.