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

What is a student loan?

A student loan has special features that are adapted to the needs of students. Student loans have good interest rates, individual design options and a resting phase. Usually building societies offer student loans. The most important features are regular payments and a delayed paying off period. Moreover, student loans do not depend on your or your parents’ income. You can also apply for a student loan when you’re already receiving child or study benefits.

A student loan is purpose-bound, which means that the purpose of the loan is taken into consideration in the application process. The monthly payments are primarily designed to help you pay for your daily life as a student. A student loan is intended for university fees, study material, living and transportation costs and exchange semesters.

How does a student loan work?

There are three parts of a student loan:

• Payment period: The loan is paid 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 addition to the traditional student loan that we just described, there are also instalment loans with special conditions for students.

Instalment loans are 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

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

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 have some tips how to save money as a student, when cooking and traveling and working out!

And please keep in mind that a 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!