When referring to student loans what is a grace period?

Financing university and postgraduate studies can prove to be a particularly heavy financial commitment, including fees, books, private and master’s faculty fees, the cost of accommodation for off-site courses. A burden that not all families can afford, and the facilitation tools for the right to education – scholarships and regional calls – are not always accessible. But for those in difficulty in paying for their studies, there are many possible ad hoc financing solutions: from loans for university students to the loan of honor.

What is the loan of honor

A classic formula for financing studies is the loan of honor , widespread above all in Anglo-Saxon countries but also available in Italy. This is a subsidized loan for students , who can access it without the need to provide real guarantees or to guarantee a certain type of income . The rates are reduced, and there is a grace period before starting the repayment of the installments, which is usually two years from the end of the studies, to allow the student to be able to start earning before having to repay the loan. The repayment plan may have a very long duration, and it is possible to modify its duration or to request the suspension of the installments.

Some Italian banks have responded to the need of families to have the tools to face the often very high costs associated with university education, by making loans of honor with the characteristics described above available. The conditions may vary from bank to bank : in some cases the maximum amount that can be requested changes, in some cases access is available only for those residing in Italy, or it can be obtained for studies in certain affiliated universities.

Loans for students

Alongside the actual loans of honor, other financing formulas designed by banks or finance companies are available on the market specifically for students. The formulas may vary in terms of maximum amounts and rates applied, but even in these cases , since these are student loansmore favorable conditions are provided than those of a normal personal loan , such as the possibility of skipping or postponing some installments. Some formulas provide for more favorable conditions based on merit, such as the possibility that the interest rate will drop if the university grade average is raised. In some cases, however, since they are not real loans of honor, it may be envisaged that the loan is backed by a surety or collateral.

Some of these loans are available only for the financing of university and postgraduate studies, some are limited only to the expenses of the masters, but others also cover the financing needs of study trips abroad or language courses. Certain formulas available on the market provide for the financing not only of the cost of the university but also of the accommodation.

Aid from the Study Fund

Even outside the specific products offered by individual banks, whether they are real honorary loans or student loans, families can apply for loans to support university studies by accessing the guarantee granted by the Study Fund , which most of the Italian banks adhere.

Students between 18 and 40 years of age , enrolled in a three-year, single-cycle specialist degree, a master’s degree course, a first or second level university master’s degree, a specialization course or a specialization course can apply for it. languages ​​of not less than six months recognized by a certifying body. It is necessary to be up to date with the payment of university fees and to have obtained high marks in the previous cycle of studies (at least 100/110 in the case of a university degree, at least 75/100 in the case of a higher diploma).

The loans that can benefit from the guarantee of the Fund can be accumulated up to a maximum amount of 25 thousand euros and are disbursed in annual installments between 3 thousand and 5 thousand euros. The guarantee of the Fund covers 70% of the exposure of the loan disbursed for the principal amount, and the banks cannot ask the student and his family for any additional guarantee. The rate is established by agreements between Abi and the Youth Department and the repayment takes place over some time between 3 and 15 years. However, the amortization plan cannot start before the thirtieth month following the disbursement of the last installment.

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By Michael Caine

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