In the middle of August, LHV introduced the new conditions for student loans and started to accept applications. The first weeks show that the best loan conditions on the market have significantly increased the interest of students in LHV student loans.
The new interest rate for student loans in LHV is only 1.95% + 6 months’ Euribor instead of 5%. In addition, while one of the main obstacles for young people used to be securing a student loan with two guarantors, now one guarantor is enough. The maximum loan amount was also increased by 500 euros and is now up to 3,000 euros per academic year.
According to Catlin Vatsel, Head of the Private Financing Department at LHV, information about the significantly improved conditions has also reached students, as LHV received more applications in the first two weeks than in August and September last year. ‘While last year a total of nearly 500,000 euros worth of student loans was issued in Estonia during the month of September, this year we received applications for the same amount in the last two weeks of August alone,’ Vatsel says.
In most cases, the maximum amount of 3,000 euros is requested. Vatsel admits that, although the amount is not very large, it is a big help for many students. ‘The most common use of student loans is to buy equipment for studying, such as a laptop, but they can also be used to cover living costs or tuition fees. Education is a value that is always worth investing in, and we are committed to supporting learners along the way,’ Vatsel adds.
Linking the interest rate on a student loan to the Euribor means that the bank reviews the Euribor every six months and the change is reflected in the loan payment. For example, today’s interest rate would be 2% + 1.077%, or a total of 3.077%. When the Euribor rises, so does the loan payment, and vice versa. If, due to a rise in Euribor, the total interest rate on a student loan exceeds 5%, the rest will be paid by the state, i.e., the maximum future interest rate for the client will be 5%. During the period of study, however, the student only pays the interest payment, which is automatically taken by the bank once a year in November.
Student loan contracts can be signed from 1 September until 31 May. Loans will start to be transferred from 15 September, and for freshmen from 1 October. In view of LHV’s new favourable terms and conditions, all clients who have previously taken out a student loan with another bank are welcome to conveniently transfer their existing loan to LHV and benefit from the new conditions.
More information: https://www.lhv.ee/en/student-loanAll news