The education loan – for secured financing of your education
Studying is expensive. Semester fees, the cost of buying books, and high accommodation and living costs in university cities mean that students often take a long time to complete their studies or even drop out – because not every student has a family that can support them fully financially.
Money can also be tight during training due to the low training salary. You may need your own car to get to work. If necessary, the place of residence must also be changed and a separate apartment must be furnished. The education loan can bridge financial bottlenecks and allow them to focus on their studies or training. We'll show you how to get an education loan in this post.
FAQ about the education loan
What is an education loan?
An education loan is a loan that is specifically aimed at trainees and students. In addition to the state education loan from KfW, there are also numerous banks that offer education loans.
KfW education loan: How long does the processing take??
Fast money is not to be expected with the KfW education loan, the processing may well take a few weeks.
Who can apply for an education loan?
The state education loan can be applied for by trainees and students who are between 18 and 35 years old and who are completing their training or studies full-time. The educational institution must be BAfoG-recognized.
The goal of the education loan
This is important
The goal of the education loan is to allow trainees and students to fully focus on their education and studies. You should be freed from existential fears and financial problems and be able to find enough time for your education.
Due to financial problems and shortages, a large number of students have to work time-consuming and power-intensive part-time jobs. This often leads to students taking a long time to complete their studies. In some cases, the lack of financial security leads to students dropping out of their studies or even to psychological problems.
A loan is to ensure that just this does not happen. With the help of the educational loan you can focus on your studies and get needed money besides BAfoG easily and quickly. Since most students do not have financial resources or collateral, they find it difficult to get a loan from a bank.
Even trainees have a hard time financing their lives from their training salary. The education loan is intended to close this gap and provide students and trainees with the money they need to successfully complete their studies. In addition, with an education loan you benefit from interest rates that are below the normal interest level.
These are possible lenders of an education loan:
The Federal Office of Administration in combination with KfW
The state education loan
The German government launched the education loan program some time ago to provide financial assistance to students and trainees. You can easily apply for the loan online at the Federal Office of Administration. Due to the flexible design, the loan can take into account different personal situations and living conditions. KfW takes care of loan closing, installment payments and reclaims.
The deficiency guarantee, also called federal guarantee ensures that the trainees and students can get the education loan at low interest rates. The education loan is independent of assets – and that of both the income and assets of the students and their parents. In principle, the state offers the educational loan for the same courses of study and training as BAfoG. Here, the loan is aimed at students who are in the final stages of their education.
Private education loans from banks
But not only the state has come to the realization that students and trainees need loans designed specifically for them. Both banks and other financial service providers and also student unions offer students favorable loans. These educational loans differ from the student loan of the German state mainly by the higher loan amount and the longer term.
For this, the interest rates are nowhere near as good as at the state institutions. When comparing education loans, it makes sense to look in advance at what you really need. Depending on the amount of the loan, a different education loan is then suitable for you.
Typical features of the education loan
Features of the state education loan:
Many typical features characterize an education loan. Especially in the case of the state variant, the education loan comes with interest rates that are significantly lower than those offered by banks. With the state, you are spoilt for choice as to how much money you need. You can choose your desired amount between 1000 and 7200 euros. This limitation does not exist in this amount at private banks.
Various banks allow students to borrow significantly more money. There is also flexibility in the monthly payments. Depending on your personal needs and life situation, you can choose how much money you need to support you each month. One-time payments are also possible, for example, if you need a new laptop for your studies.
The effective interest rate is less than one percent for the education loan from the government. The low education loan interest rates are therefore looking in vain for your equal. Especially with the state variant, you can easily apply online from home. The loan period is a maximum of 24 months – with private providers, a significantly longer disbursement period is possible.
If you get the education loan with interest rates that are low, you can use the money freely. Eligible are all second education, second degree programs and much more. So you can take advantage of an education loan in different cases, so that you then benefit from greater financial flexibility. This allows you to better focus on your studies to successfully complete them without distractions.
Features of the education loan from banks:
Interest rates vary from bank to bank, but are generally higher than for the state education loan flexible monthly payments and one-time payments are possible
What requirements must students and trainees meet for an education loan?
If this sounds basically good for you and you have found the best offer for you personally in an education loan comparison, it goes into the nitty-gritty. Now you need to see if you meet the requirements for an education loan. The education loan is primarily aimed at trainees and students who have already started their education and studies. Finally, the education loan is to close financial gaps.
However, in order to recognize these gaps, you must already be studying or have started your education. An ongoing study or training are consequently necessary to get an education loan. But that alone is not enough – most providers of an education loan also require that the studies have already advanced. Education loan aims to help students focus on learning at the end of college.
Another general requirement relates to the age of the applicant. You can only apply for an education loan if you are between 18 and 35 years old. The age limit is mandatory for all loan providers. If you meet these requirements, you basically have the possibility to apply for an education loan.
Depending on the provider, there may be additional requirements. In the case of the German government, the loan program is also limited within an existing budget, so there is no legal entitlement to the student loan. However, with a little luck, you can soon benefit from the education loan and interest from the government.