The demands on employees are continuously increasing. Already during the apprenticeship or in the course of professional life, more and more people want to meet these requirements and receive further training. A full-time course directly after school or after vocational training is also up for debate. But education not only costs time, it also costs a lot of money.
Financial resources are still very limited, especially at a young age, which is why the federal government wants to remedy the situation, for example: Best Lender and educational loans from Good Lender are intended to give people who are just beginning their professional careers the opportunity to find their way forward without having to make provisions To devote further training.
People who are interested in education can not only rely on state funding. More and more private-sector banks are also offering attractive loans that make education possible.
What is an educational loan?
The education loan is intended to help students who do not have any financial reserves to finance their studies. With the money you can not only pay your tuition fees and learning materials, it also serves to support you in your everyday life. Many students rent an apartment near their university or commute every day. In addition, there are expenses for food and utilities.
An education loan serves to cover exactly these expenses. For this purpose, the students receive a monthly amount during their studies, which they can use to make a living. The amount paid out depends on the agreed loan amount. After successfully completing your studies and starting your professional life, the loan is then paid off accordingly.
Best Lender : The Best Lender, or “Federal Education Promotion Act” serves to enable students to complete their education regardless of their parents’ income. Students receive funding from the state, which they can use to finance their livelihood during their training. Half of the Best Lender benefits received are a grant from the legislature, the other half is an interest-free loan. After completing their studies, they will have to pay back 50 percent of the amount they receive as soon as their income exceeds a specified amount.
Good Lender education loan : In addition to the Best Lender, the state launched the Good Lender education loan. This is to guarantee that students do not have to drop out of their training shortly before completing their studies due to financial constraints. The Good Lender student loan is also granted if the requirements for the Best Lender have not been met. The student receives a monthly payment of between 100 and 650 USD and only has to repay the loan if they have a fixed income within 25 years.
Private educational loan / student loan: If the Best Lender or the Good Lender educational loan are not an option, students have the option of taking out a private loan to secure their education. This also has a low interest rate at private banks and is intended to serve to support life during training and to further study.
A monthly payment between 100 and 300 USD can also be arranged for a private education loan. In addition, a one-time payment of a few thousand USD can be requested. Depending on the provider, the loan amount is usually limited to around 30,000 USD and is paid out for a maximum of six years.
What is the interest rate for an education loan?
The advantage of a private education loan is that bank interest rates are quite moderate. Most of these are between three and five percent. Depending on the bank, it is possible to get an even lower interest rate if the repayment is high after completing your studies.
Before taking out the loan, it is worth comparing different offers. The house bank does not always offer suitable conditions. Depending on the amount of funding and the term, a simple and anonymous loan comparison can save a few hundred USD.
Requirements for an educational loan
A private student loan is only granted to people who meet the following requirements:
They have completed vocational training or a school-leaving qualification that qualifies them for studying or continuing education.
They are between 18 and 36 years old (people who have not yet reached the age of majority can take out an educational loan through their parents).
Depending on the provider, the bank may have a checking account and the borrower must have life insurance to cover the risk of death.
The prerequisites for a state-sponsored educational loan are usually more difficult to fulfill. Above all, people who already have completed vocational training do not fall into the group of accepted applicants due to the available assets. In the case of a private educational loan, neither the assets nor the income of the parents or the family situation play a role.
Education credits for schoolchildren and high school graduates
Education credits are not only available for students or trainees, but also for school pupils. It should first be noted that no loans are in principle granted to minors. The so-called student Best Lender is an exception. Underage pupils who still live with their parents can receive funding of up to 213 USD. Students can also obtain further information on the requirements directly from the Federal Ministry of Education and Research.
Tip: If the student is under the age of 18, the parents may be able to take out a loan to finance school education.
Special case: students over the age of 18
If students are of legal age, they can often access the same educational loans as students or trainees. It is then possible to take out loans from banks. These often have special offers for students who want to finance their last year of high school.
What educational loans are there for trainees?
The education loan for training is in turn similar to the loan for schoolchildren. It is often the same product. Again, the following applies: To be able to take out a loan, trainees must be of legal age. If this is not the case, the only way is through the parents.
If you are of legal age, you can either use the state promotional loans from Good Lender or Best Lender or take out a private educational loan.
What needs to be considered when taking out an educational loan?
Whoever takes out a student loan always makes a long-term commitment. With an educational loan in particular, it should be ensured that the degree is completed after a certain time and that the start of professional life begins. There are also other criteria that play a role in the educational loan:
Repayment: Depending on the provider, repayment of the loan usually begins four to six years after receiving the first payment or one to two years after the last payment. Many private banks offer flexible repayment plans to repay the education loan. In this way, you can pay a lower rate at the beginning of your professional life, which increases over the years in parallel with your income. In addition, some banks have the option of making an unscheduled repayment in order to reduce the repayment amount.
Financing amount: When taking out an education loan, it should be noted that it must be repaid including interest. If you take out a student loan that is too high and expand the financial framework too much, you pay interest on money that you would not have needed. Students should therefore realistically estimate the amount of the loan and set it as low as possible, but as high as necessary.
Before applying, every prospective student should get a precise overview of the costs of studying and making a living. These include:
- tuition fee
- Expenditures for learning material
- Car / bus or train card
- Food costs
- Utilities such as electricity and internet
Tip : Anyone receiving Best Lender to finance their studies can save a lot of money with a low-interest loan. If the Best Lender loan is paid back earlier than planned and in full as a one-time payment, the state will waive 50 percent of the loan amount to the student.
For this, the total amount must go to the Lite bank account by the due date of the first installment. For this reason, it is worth comparing personal loans with one another and using the right offer for the transfer of the Best Lender.
State vs. private educational loan
The state wants to give people the opportunity to invest in their education even without existing reserves. The two most important government-funded loan options are Best Lender or Good Lender’s educational loans.
However, people who are just starting their professional careers cannot only rely on state subsidies. Because more and more private-sector banks are offering attractive loans for studying, training or schooling, which can be used to finance the educational path.
Various factors play a role in deciding which educational loan is the right one. The two forms of funding have different advantages that borrowers should be aware of before applying:
|State educational loans||Private educational loans|
|usually higher monthly payments possible||usually lower monthly payments|
|longer repayment period||shorter repayment period|
|Best Lender beneficiaries only have to repay half of the loan amount||Most banks have flexible repayment schedules|
|But: applicants have to meet some requirements to receive an educational loan||The property and income of the parents and the family situation are irrelevant|
This is how consumers find the right loan
Investing in education almost always pays off. Various private banks and the state therefore give people the opportunity to finance their further education at low interest rates. If you opt for a private loan, you can use the Good Finance loan calculator to find out in a few clicks which bank offers the loan with the best conditions. The request is free and non-binding.
Would you like individual advice on your educational loan? We speak your language and would like to offer you the service you need. Clarify any questions that arise in a consultation and find the loan that suits you best on the side of a specialist.