Student loan of honor: what it is and how it works
The loan of honor is a personal loan designed for young people who must graduate or specialize after university with a master’s degree, a master’s degree or a post-graduate course.
This type of loan is characterized by the most favorable repayment terms and by a simplified access to capital, as the applicant does not have to have demonstrable income. Furthermore, the presence of a guarantor is not required.
The loans of honor reserved for students and allow them to benefit, for a variable period depending on the course of study, from a line of credit in a current account intended to finance a training course and the costs associated with it.
This type of loan is disbursed by credit institutions in agreement with universities and provides reduced rates and a repayment plan spread over the years.
What are the purposes of student honor loans?
This type of loan can be requested for the following purposes:
- university fees;
- post graduate master;
- research doctorates;
- accredited courses in Italy or abroad;
- food and / or accommodation costs;
- purchase of educational material.
Specific requirements for access to student honor loans
In order to qualify for these loans, it is necessary to have certain subjective and objective requirements, such as:
- regular enrollment in the course;
- an average of marks above a certain threshold;
- lack of economic means;
- aged between 18 and 35;
- residence in Italy.
The bank investigation, by the partner institution, is required to ascertain the existence of these requirements and the loan is granted at the discretion of the bank itself.
What are the advantages of student honor loans?
Compared to other forms of financing, the honor loan has specific advantages :
- access to the loan is facilitated by the agreements entered into by credit institutions with universities and graduate schools;
- the rates are more advantageous : if traditional loans have an APR between 9-10%, the loan of honor has an average APR between 5% and 6%;
- the refund does not take place immediately, but only after having used the entire sum paid, therefore once the course of studies has ended;
- the repayment of the loan takes place over a very extended period of time.
The different methods of reimbursement
The refund of the money requested usually takes place in installments, which will take place at the end of the course of study or when he enters the world of work. Refund options can include:
- pre-amortization : the student only returns the portion of interest accrued during the period of use in a single solution;
- amortization : the installments, which include principal and interest, are divided into a certain number of years, from 5 to 8. The payment starts after the use of the money;
- early repayment : the repayment begins before the expiry of the amortization phase. If the applicant has the possibility, he can obviously pay the sum in a single solution.
In the event that the loan is shared by a public body, which has an agreement with the bank, the student can request a refund of the interest or of the principal due.