Just a few more days of patience: the results of the baccalaureate will be revealed on July 8. The happy graduates will then be able to officially register at university, in a preparatory class or in a post-baccalaureate engineering or business school. It is then necessary to pay all or part of the tuition fees, often thanks to the financial support of the parents. To supplement this budget, young people can take out a student loan, the maximum amount of which is between 50,000 euros and 75,000 euros depending on the bank, and up to 200,000 euros at BNP Paribas.
Student loans are showing very reasonable rates this year, ranging, for the best offers, between 0% and 2%, because banks are on the lookout for these new customers. Once the young graduate has entered working life, they will be able to offer them investments or, in the longer term, a real estate loan. Banque Populaire Franche-Comté, Caisse d’Epargne Grand Est, Crédit Mutuel Alliance Fédérale and LCL offer 0% loans for amounts between 5,000 euros and 50,000 euros.
Please note that in the Crédit Mutuel and CIC federations, the student’s tax household must have a family quotient of less than €29,000 to benefit from this offer. For its part, Crédit Agricole Ile-de-France offers a loan of up to €75,000 at 0.50%. Other banks display rates between 2% and 3%, depending on possible partnerships with schools.
Majority required
As with any credit, the granting of a student loan meets certain conditions. The borrower must be of legal age. It can happen, but it remains rare, that a high school graduate needs a student loan even though he or she will only reach the age of majority a few months later. “In this case, it is exceptionally possible to grant a loan to your parents to finance the first year of studies, until their child becomes an adult,” indicates Julie Selas, course and credit offer manager at LCL.
In addition, as with any other loan, the bank checks the borrower’s solvency and may request a guarantee. For students who cannot obtain one, it is possible to apply for a state-guaranteed student loan via Bpifrance. It is capped at 20,000 euros and distributed by Banque Populaire, Caisse d’Epargne, CIC, Crédit Agricole, Crédit Mutuel, La Banque Postale, Banque Française Commerciale Océan Indien and Société Générale.
Establishments generally offer to release the amount borrowed in several installments, to accommodate the payment of annual tuition fees. “We systematically pay the funds in several installments for loans greater than 35,000 euros,” explains Olivier Morin, member of the management board of La Banque Postale Consumer Finance. “This is in the interest of the customer since he only pays interest on the amount actually disbursed.” Otherwise, it is prudent to isolate the amount in a savings account, from which the student can draw as and when needed.
Possible refund deferral
In addition, the subscriber can choose when he wants to start repaying his loan. This can be done immediately, if he has enough income to do so, or later, within a maximum of five years. The advantage is that the student will then have entered the workforce, and will repay his monthly payment with his first salary. But be careful, the total repayment period of the student loan is often capped at ten years, including the deferral.
The borrower chooses between a partial franchise, during which he only pays the interest on the loan but not the capital, or a total franchise, during which he pays nothing. “It is better to opt for a partial deferral, which is less costly. In addition, the monthly payment of interest reminds us that we have subscribed to a loan!”, indicates Guy Poyen, marketing and markets director of Crédit agricole Ile-de-France. Because a loan binds you and must be repaid, according to the established formula of the Consumer Code.
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