Student loan in Austria: Important information and facts for financing your studies

What is a student loan?

A student loan is a way to financially support your studies if your own funds or regular income are not sufficient. It’s designed specifically for students and helps cover the ongoing costs that come with university life. Usually, a student loan is not dependent on your income or your parents’ income and can also be applied for even if you are already receiving family or study allowances.

Unlike traditional loans, a student loan is usually more flexible and tailored to the living situation of students. The goal is to take some financial pressure off so that you can focus more effectively on your studies. The money is primarily intended for tuition fees, study materials, housing and travel costs, or a semester abroad.

How does a student loan work?

There are three parts of a student loan:

• Payment period: The loan is paid in full at the beginning or monthly (sometimes semi-annual or annual) in small amounts. (1-14 terms)
• Grace/inactive period: During this time, you neither receive money nor have to pay back money. That’s usually right after you’ve finished your studies. (3-24 months)
• Repayment period: You pay off your loan in small instalments.

The inactive and repayment periods strongly influence the total amount of money you have to pay back. The longer the inactive period between payment and repayment period, the higher the interests. The amount of your instalments (and therefore the duration of the repayment period) also play an important role because the smaller the instalments, the higher the interest costs.

Types of student loans in Austria

A student loan isn’t just a student loan. In Austria, there are two different models that vary mainly in how the money is paid out and how you pay it back.

Traditional student loan

The traditional student loan is what most people think of first. You receive a fixed amount on a regular basis during your studies – usually monthly – to help cover ongoing expenses. After graduation, there’s typically a grace period before repayment begins. But in Austria this traditional model is relatively rare.

Instalment loans

The installment loan is the most common type of student loan in Austria. It’s particularly good for one-time expenses during your studies. You receive the complete loan at once and start repaying the loan while you’re still studying. Instalment loans are tied to additional requirements like a minimum income and active employment.

So, if you need an additional monthly income to finish your studies comfortably, then a traditional student loan is perfect for you. An instalment loan works better for one-time acquisitions during your studies (e.g. moving into your own flat, buying a car).

Advantages & Disadvantages of student loans

Student loans have many advantages for students, but there are also some disadvantages to keep in mind. Here are the most important aspects:

Step-by-Step guide: applying for a student loan

If you’ve decided to apply for a student loan, we have compiled a list of clear instructions on what you have to do:

1. Find service providers (e.g. Wüstenrot Bausparkasse, sBausparkasse, Raiffeisen Bausparkasse)
2. Compare offers (e.g. interest rates, repayment modalities, payment terms, etc.) and calculate different models (e.g. longer or shorter inactive period, higher instalments, etc.)
3. Make an appointment with you bank or apply online for a student loan
4. Print or upload necessary documents (e.g. proof of matriculation, record sheet, registration confirmation, etc.)

STUWO Bonus tips for your student loan

It really makes a difference to compare different offers and loan terms. This way you can save a lot of money! There are many websites that compare providers and illustrate differences between offers, for example durchblicker.at or finanz.at.

• Pay attention to interest rates and whether they are frozen for the complete loan term or variable.
• Think about how long the inactive period should be. The shorter, the lower the interest costs.
• The monthly instalments are also important. The higher the repayments, the lower the interest costs.
• If you are unsure which offer is the best, then you should definitely consult a bank adviser.

If you require financial aid during your studies, a student loan can be helpful. Thanks to the flexible design options, you can adapt the loan to your individual living situation. You determine how high the monthly payments are and when you start to repay your loan. Oh and if you also need a student bank account, we’ve got an overview here!

This individual design allows you to influence the amount of money you have to pay back. However, we recommend handling your money wisely and use some of our tips on how to save money as a student, when cooking and traveling and working out!

And please keep in mind that a student loan is not free money and you should not borrow a lot of money without consideration or good reason. Because sooner or later you have to pay back everything!