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Further Below: Our Guide To Student Loans in Spain, Everything you need to know.
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Student Loans in Spain, All You Need To Know:
To pay the tuition, advance the scholarship, go on Erasmus or finance a master’s degree. Discover the credit options designed to pay for your studies. We explain you what types there are, how to compare their conditions, what to take into account and the best offers of loans to study.
What you should know about student credits:
- There are different types of loans adapted to different types of studies
- Student loans often have more advantageous terms than other loans
- It is recurrent that we are asked for a guarantee in order to be granted the financing
- Student loans can be applied for by students or parents
- These loans allow for a 1 to 5 year grace period
Types of student loans we can apply for
In general, when we talk about student loans, the first thing we think about is the credits that some banks offer to finance college tuition. But the truth is that with these products you can pay many other expenses related to your studies, always depending on the conditions of each offer. In the following list we see what we can finance with a loan of this type:
- Finance a degree. Here we can distinguish between two types of loans for university studies:
- Those that allow us to finance only the costs of tuition. Presenting the tuition itself as proof, we will be granted the total cost (or a percentage) of this.
- Those that cover all expenses related to the studies such as tuition, material, transportation or even the stay.
- Scholarship Advances: whether it is a scholarship in Spain or to study abroad, as many of these grants arrive later than the beginning of the course, many entities offer to advance the total amount granted with the scholarship.
- Postgraduate studies, such as a master’s degree, a postgraduate diploma or a doctorate. Depending on the credit, we can finance only the registration fee or all the expenses associated with the course.
- Studies abroad, such as a language course, an Erasmus, a master’s degree, etc. Generally, they usually advance the amount of the scholarship granted in order to have it from the beginning of the course and which will be charged once we receive it.
- Specialized courses: such as a middle or higher grade training cycle, computer classes…
- Financing of laptops. Both banks and big brands offer special offers for the purchase of laptops in installments with more advantageous conditions.
As the characteristics of each type of training are different, the offers to finance them are also different. It is important to specify our type of study to the entity so that they can advise us with the products best suited to each training.
Many universities, schools, academies and institutes have agreements with certain banking institutions with which we can finance the cost of the particular studies we want to take. These types of agreements allow us to obtain financing tailored to the course and usually have (generally) more advantageous conditions than other loan offers to study generics.
It is always worth asking at our school about this type of agreement in order to evaluate and compare the offer and know if we are interested.
Are student loans cheaper?
Yes, student loans tend to have a lower interest rate than personal loans for any purpose, although it must be said that it all depends on the conditions offered by each financial entity.
As a general rule, the average APR for these products is between 3% and 6%, while the average for consumer loans is over 8%.
They also tend to have other advantages, such as slightly longer terms (up to 10 years in some cases), initial shortfalls, flexibility in repayment or, in exceptional cases, interest of 0%.
Characteristics of student credits
Although these are very low interest loans, it is important to know all the characteristics of the loans for this purpose:
- Interest: the average cost of these loans is between 3% and 6% with some offers at 0%. Any study loan above this percentage will be considered expensive.
- Commissions: we must always be careful with the commissions that our study loans may include, since there are many banks that charge them.
- The opening fee, for example, is usually between 1% and 2% and will be paid the first month of repayment.
- The early repayment fee cannot exceed 1% (or 0.5% if capital is advanced in the last year of the term) and will only be paid if we decide to repay the loan before the agreed term.
- Binding. As for the conditions of tying, the credits to study can include some type of tying, generally they are free tied products adapted to the profile of the student like a current account and a card that we will have to use.
- However, it is always important to check that the links that you ask us to contract do not have additional costs.
- Endorsements and guarantees. Especially if we are university students and do not work or are minors, it is very possible that we will be asked to have our parents or guardians act as guarantors.
Requirements to be able to apply for a loan as a student
The requirements for taking out a student loan are usually a little more lax than for loans for other projects, such as financing a car. Although it is important to comply with all the conditions required by the banks in order for the operation to be approved. Generally the entities will ask us for the following:
- Be of legal age. All loans must have a holder of legal age. If we are minors, it must be the parents or guardians who apply for the financing as holders.
- In some entities they will only allow the parents or guardians to apply for the financing.
- Not to appear in a file of non-payments as ASNEF, even if it is about debts or misunderstandings with a telephone company, they will not approve the application.
- Present a proof of payment. It will be indispensable to present the registration of the studies or the concession of the scholarship to be able to accede to this type of income.
- To have an income. Generally they will ask us to have an income that allows us to pay the quotas of the credit without problem. However, there are several exceptions:
- If we do not have income: we will be asked to have a parent or guardian apply for the funding.
- Sometimes, depending on the bank and the type of education, we can be granted loans to study without having an income to pay them back later when we have a job. Generally these grants are given to careers with a lot of output such as medicine, engineering or computer science.
- If our income is low or unstable, they may ask someone with a stable income to guarantee the credit.
- If we apply for a scholarship advance: in this case, no income (or collateral) will be required, since when we receive the scholarship money, it will be transferred directly to repay the loan.
- Residing in Spain. It will be essential to live in Spanish territory and have an ID card to prove it.
- In the case of loans for studies abroad (Erasmus, for example), as it is an advance on the grant, there will be no problem.
As we can see, there are different requirements depending on the type of financing for training that we need.
Can I get a student loan if I don’t work?
It depends. There are entities that, if the student does not work, allow him/her to add guarantors or co-owners (the parents, for example) that guarantee the repayment of the credit in case he/she cannot. Others, on the other hand, require that there is only one holder, in which case it will be necessary to have a payslip to prove that we will be able to pay the monthly payments throughout the entire repayment period.
In the case of scholarship advances, as it is necessary to provide proof of the award of this aid, it is easier for the student himself (even if he does not work) to hire him without a guarantee.
There are study credits that can be paid later
If we ask for a student loan, it is likely that the entity will offer us a total or partial grace period, that is, not to pay anything or to pay only the part of the interest during the first years of the contract’s life (generally between two and five). This option can be convenient in certain cases, since we will not have to worry about the fees while we are studying and we will be able to start paying them when we are already working.
About this page, our methodology
What this page is for: our goal is to help you get the best financing for your needs. Therefore, here we explain you what credits with payday guarantee are, how you can compare them to know which one suits you and which offers are the most attractive right now.
Source: the information regarding the main characteristics of payday loans and their current regulation comes from Law 16/2011 on consumer credit contracts among other reference portals.
Methodology: the data relating to the conditions of these products (amount, term, interest, etc.) have been obtained through online research and consultation of the official statistics of the aforementioned reference sources.
About FUNDGECKO: we are an online comparator specialized in personal finance and home economics products. Here you can, in addition to comparing the conditions of all offers, find quality information that will help you identify the payday loans that best suit your needs.
Note: the services we offer are totally free for the user, as FUNDGECKO obtains its income from advertising and its featured products.