Loans: to be enjoyed with caution

In most cases, loans are the worst way to finance your studies because they are often expensive. So before you decide to include a loan in your financial planning, you should check how much you actually need. You can use a simple needs calculator in Excel format to do this.

The needs gap - the difference between income and expenditure - is determined by comparing income and expenditure. If there is a gap, you don't necessarily have to close it with a loan. By increasing your income and/or reducing your expenditure, you can always get away with it more cheaply. The Student Financial Counselling Service can help you with this and show you other alternatives to loans.

On this page, we present the most common loans for students. Please take advantage of our advice before you sign a loan agreement.

Education loan

The education loan is a federal government programme to provide funding for students at an advanced stage of their studies. This loan can also be approved alongside BAföG benefits to finance expenses such as study materials, study abroad, excursions, hardware and software and the like.

Who is sponsored?

As a rule, German citizens who have successfully completed two semesters of a Bachelor's degree programme. There is a further entitlement for the Master's degree programme. Foreign students can generally receive the loan if they are in Germany with a confirmed residence status (based on § 8 BAföG). The loan can normally be granted until the end of the 12th university semester. All previous semesters of study count as university semesters, only semesters on leave are deducted unless they were taken for study-related reasons (example: semesters on leave for a compulsory internship). The benefit can only be utilised beyond the 12th semester if the Examination Office certifies that the student will graduate within the next 24 months. In any case, payment is only made up to the 36th birthday.

How is funding provided?

The following monthly instalments are available: €100, €200 or €300. Up to 24 monthly instalments, i.e. a maximum of € 7,200, can be approved within one training period. In the case of special requirements (e.g. cost-intensive work materials), a one-off payment of up to €3,600 can be applied for. However, the maximum amount remains at €7,200 per training period.

Interest and repayment

Interest is payable on the education loan from the date of disbursement. The interest rate is variable and is adjusted to the European interest rate market development (EURIBOR) on 1 April and 1 October (more on interest rate development). The education loan is repayment-free for four years, starting with the first disbursement. At the end of the repayment-free period, repayment begins in monthly instalments of €120. The education loan can be repaid early in full or in part at any time without incurring additional costs or fees. It can always be cancelled at the end of the month. The repayment instalments are deferred if a Master's degree is funded after the Bachelor's degree or in the event of repayment difficulties due to a lack of income after the end of studies. However, interest continues to accrue.

Application

Anyone wishing to take advantage of the education loan can contact the student finance advisor (counselling only) or the Federal Office of Administration, 50728 Cologne, directly via the Internet at www.bildungskredit.de. The application should be submitted at the earliest six weeks before the start of disbursement, as there must be a temporal connection. Submitting the application online is the only option, but the required supporting documents must be submitted within two weeks.

Performance of signature and notarisation

You must go to a bank to sign the loan agreement, because since 1 January 2018 only banks can carry out the legitimisation, no other seal-bearing bodies. The signature must be made in the presence of the legitimising person.

The contract appendix also includes the authorisation for a SEPA direct debit, which you should complete and sign before the visit. Also make sure that your ID card is valid and bring a copy of the front and back of your ID with you.

KfW student loan

  • The student loan is aimed at all students who are a maximum of 44 years old at the start of funding. For students who have exceeded the age limit but have already completed semesters in the degree programme currently being funded, the semesters already completed at the start of funding will be counted towards the maximum age. Postgraduate degree programmes, part-time degree programmes, doctorates and second degree programmes can be funded.
  • Loans are granted irrespective of the university, subject and grades. The funding amount is between 100 and 650 euros per month.
  • Both the loan amount and the repayments can be adjusted during the term of the loan. Unscheduled repayments are possible during the repayment phase without additional costs.
  • In most cases, up to fourteen (10 + 4 final semesters) semesters of study are financed.
  • Neither your parents' nor your own income is checked. No collateral has to be provided. Only those who have filed for personal insolvency will not receive a loan.
  • The last payment is followed by 18 to 23 repayment-free months.
  • You have up to 25 years to repay the loan.
  • The minimum repayment instalment is 20 euros per month.
  • Payment is suspended during semesters of leave.
  • At the end of the sixth semester, students submit a certificate to KfW confirming that they have successfully completed their studies up to this point, otherwise the funding will be cancelled.
  • In order to receive payments for additional, supplementary or postgraduate studies or a doctorate, proof of an existing university degree must be provided.

Important to know:

The BMBF's special coronavirus programme for the KfW student loan came to an end on 30 September 2022. In addition, the European Central Bank has initiated an end to the low interest rate policy. The drastic result is a sharp rise in interest rates.
So think very carefully about whether and to what extent you want to use this instrument.

 

The Studierendenwerk Oldenburg is not a sales partner for this loan. The student finance advisor will be happy to inform you, also with regard to alternatives. The sales partner search (usually your house bank) takes place on the KfW website.

KfW Förderbank always sets new interest rates for its loan offers on 1 April and 1 October. As KfW not only issues its own student loan, but also the education loan and the BAföG bank loan, the interest rate development affects quite a few students.

 

Since 1 April 2012: Fixed interest rate offers

The table below does not include the fixed interest rate offers available since 1 April 2012. However, you can look them up yourself on the KFW website under "Education".

Offer / Date10/2004/2110/2104/2210/2204/2310/2304/241.10.24
KfW student loan
(variable)		(Note)(Note)(Note)(Note)5,90
(6,06)		7,55
(7,82)		8,66
(9,01)		7,26
(7,51)		6,64
(6,85)
Education loan
(variable)		0,52
(0,52)		0,47
(0,47)		0,47
(0,47)		0,62
(0,62)		2,82
(2,80)		4,37
(4,32)		5,19
(5,12)		4,93
(4,87)		4,19
(4,14)

(Figures in brackets indicate the effective interest rate, which was extrapolated by KfW using programme-specific assumptions)

KfW Förderbank bases all its offers on the EURIBOR key interest rate of the European Central Bank. Other banks that offer student loans should actually proceed similarly with their offers.

The fact that the interest rates vary between the different KfW offers is due to the different details. For example, the education loan is more favourable because the federal government assumes the default guarantee, meaning that the bank has to price in practically no risk.

Note on the BAföG bank loan: As a result of the 26th BAföG reform, the main parts of which came into force with the 2019/20 winter semester, the "full loan" benefit option is no longer processed via KfW Förderbank, but by the state itself on an interest-free basis. KfW therefore no longer shows a variable interest rate for this in its own overview. For old contracts, the interest rate development is nevertheless interesting, but you can look this up yourself in the KfW presentation linked above.

Note on the KfW student loan (as of 04/10/2022): In the period from 1.5.2020 - 30.09.2022, the interest rate was set to 0% by an emergency programme of the BMBF on the occasion of the Corona crisis. However, interest will continue to be paid on the loan amount disbursed during this phase from 1 October 2022.