According to the Knowledge and Development Foundation (CYD) 2015 Report, last year there was a drop of 100,000 students enrolled in a grade compared to the 2011-2012 academic year. The increase in university enrollment in recent years is one of the reasons why many parents have difficulty paying for their children’s careers. For this reason, many families choose to take out easy payday loans, really easy to get.
What is the grace period for student loans?
The increase in the prices of university enrollments by 20% during the last four years, as indicated by the CYD study, may be one of the causes of the decline of students enrolled. If we do not have enough money to pay for university tuition, a solution may be to hire a loan for students with a grace period, that is, not pay part or all of the credit during a certain period of time. Depending on the amount we request and our economic circumstances, we can choose between these two types of deficiency:
Total lack: the possibility of not paying neither the principal nor the interests of the loan during a determined period.
Partial lack: we will only have to pay the interest and not the capital of the credits for students during the agreed term.
However, we must bear in mind that interest will accumulate during the grace period. For this reason, before requesting a deficiency, we must evaluate other financing products, such as the ones shown below, which have very flexible repayment terms:
|Cofidis Credits||Amount||Cost||Term||Terms||I’m interested|
|Cetelem Personal Loan||From € 3,000 to € 50,000||From 5.95% TIN ( 7.18% APR)||The maximum term of 8 years||
Money in 48 hours
|BigBank Plan Loan||From € 2,000 to € 15,000||From a 6, 74% TIN (6.95% APR)||The maximum term of 6 years||
No linked products
Money in 48 hours
Free advance refund
2 months warranty
Free early amortization
No study commission or opening commission
|Project Credit Cofidis Studies||From € 3,000 to € 15,000||From a 4.95% TIN (5.06% APR)||The maximum term of 4 years||
Does not have mandatory contracting of linked products
Money in 24 hours once the application is approved
No need to change banks
The decision on whether to choose a grace period or to contract a personal loan with a more flexible repayment period depends on our economic circumstances. Therefore, before choosing one or another option we must assess how much it will cost us and if we can pay the installments with 35-40% of our fixed income so that we avoid the risk of over-indebtedness.
How much can the grace period for student loans cost us?
We must bear in mind that during the grace period the interest on the loan will accumulate and the total price will increase. For example, if we request a credit of € 3,000 to 10% TIN with a repayment term of 4 years we will have to reimburse a total of € 3,652. On the other hand, if for this loan we requested a partial deficiency period of 2 years, we would have to reimburse a total of € 3,922, that is, € 270 more. In the event that we requested a total deficiency, we would have to pay a total of € 4,054, that is, € 402 more expensive. Therefore, before requesting a grace period, we must consider other alternatives, such as lengthening the reimbursement period to have lower fees. If we choose to extend the return period from 4 years to 6 years with the example we have shown, we would have to pay a total of € 4,001. In this table, we can see how much each option would cost us.
|Amount||Interest||Reimbursement period||Lack||Dues||Total cost|
|10%||4 years||Do not||€ 76.09||€ 3,652|
|€ 3,000||10%||4 years||Yes (partial)||€ 25 during the grace period
€ 138.43 during the rest of the period
|€ 3,000||10%||4 years||Yes total)||€ 0 during the grace period
€ 168.95 during the rest of the period
|€ 3,000||10%||6 years||Do not||€ 55.58||€ 4,001|
Therefore, if we lengthen the repayment term by two additional years, the financing product would cost us € 79 more expensive than with the partial lack and € 53 cheaper than with the total lack.