Student credit: characteristics and types

Student credit: characteristics and types

Who can apply for a student loan?

Any student can apply for a student loan provided that his studies are sanctioned by a French higher education certificate or competition. To claim a student loan, you must:

  • Present a student card, school certificate or certificate of enrollment in a school or university;
  • Be of French nationality or have resided in France for at least 5 years.

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Student loan: characteristics

Legally A student loan falls into the category of dedicated consumer credit: the financier asks for knowledge of the allocation of funds, for example, the purchase of movable property (furniture, a car) or services that allow for the financing of studies, the purchase of a computer, etc.

The term of a student loan is variable, often between 2 and 10 years.

For blogging: Even if this option is possible, provided you have a strong parental guarantee and do solid training with guaranteed professional opportunities (medicine, etc.), it is difficult to get a mortgage while you are a student, because borrowers have few collateral to give to a credit institution.

Consumer student loans fall into two main categories: those guaranteed by the state and those that banks give out for free (the competitive sector).

Banking Sector Student Loans

Many banks offer student loans at low rates to attract long-term clients. Before releasing it, the bank requests guarantees from the borrower such as a guarantor or a bond.

The annual fee percentage (APR), which includes all costs and incidental costs related to financing, is often less than 1%. Students should use it to compare offers made to them by several banks. Even if it is not mandatory, the lending institution can request to subscribe to the borrower’s insurance. At equal or close APR, it is generally better to choose the most flexible formula, because the student faces many uncertainties.

Good to know: In the framework of partnerships with certain schools or universities, more competitive terms (zero rate loan) can be found.

Student loans with an average value of about 20,000 euros come with a grace period: repayment of principal and interest begins only when the student enters working life (deferred total). On the other hand, he is obligated to pay an insurance fee every month. This formula is expensive because the interest accrued each year is added to the amount of capital borrowed to become interest-bearing.

Other formulas provide for a partial deferment: repayment begins during the school years, but only covers interest and insurance premiums. The capital is repaid for the second time.

The loan can be fully released in one go or gradually in several stages depending on the needs of the student. Interest begins to accrue from the disbursement of funds.

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State-guaranteed student loans

In the absence of a guarantor or proof of income for the student, a student loan can be obtained with a state guarantee (within 70% of the borrowed capital).

be careful : This funding is available from May to September in light of the upcoming academic year.

from U.S A period of no less than two years and a maximum of 20,000 eurosThis secured student consumer loan is open to all French students under the age of 28 without parental or third party guarantee, who are enrolled in a university, business or engineering school, at BTS, etc. It is still necessary to justify a regular uninterrupted stay in France for at least 5 years at the time of the conclusion of the loan, accessible to EU students.

For blogging: This loan is also available to minors over 16 years of age who have been emancipated by their parents.

The secured loan is distributed by the partner banks of the state (Bank Postal, Banque Populaire, Caisses d’Epargne, CIC, Crédit Agricole, Crédit Mutuel, Société Générale). Each partner brand has a limited loan amount for the year. They freely set the annual percentage rate of credit. So it is recommended to play competition.

The loan must be repaid (principal + interest), but this repayment can be partially deferred (only interest is paid at the beginning) or completely at the end of studies. Payment cannot be deferred after 10 years from the date of contracting the loan.

be careful : This device does not really create a student credit. Distributing banks can refuse to grant them to avoid cases of household over-indebtedness.

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