Education Loan for Germany

International students, who aspire to study in Germany should know about the education loan for germany. Students find Germany to be their favourite study destination. It holds the eighth largest international student population in the world. You might be interested in studying in Germany but just having an interest is not sufficient. You need to know about an education loan for Germany to practically achieve your desire of studying in germany. 

Most of the students prefers Germany to pursue their education since it offers,

• Low or No Tuition fees
• Work opportunities for International students
• Countless Degree Courses
• Top-Ranked Universities
• Globally Recognized study programs

There are two major reasons that Colleges and Universities in Germany attract Indian students a lot. One is, accessing the education loan for Germany is easier. And, the educational and professional opportunities it provides. 

Education Loan for Germany - Cost of Studying in Germany vs Cost of Living

By knowing the distinction between the cost of

 and living expenses in Germany, you can know how much financial aid you need. In Germany, tuition fees are zero or low and cost of living is also reasonable. You can also save your money or get part-time work opportunities to manage your finances. Saving and allocating your money can help you to prevent student debt. 

Academic Level	No of Years	Cost in Euros (€) per semester (approx.)	Indian National Rupees (
Undergraduate Courses	3 Years	€250 to €600	₹20,000 to ₹46,000
Post-Graduate Courses	2 Years	€300 to €700	₹23,000 to ₹55,000
Doctoral Courses	2 - 6 Years	€300 to €500	₹23,000 to ₹40,000
Average Award Amount of Scholarships in Germany		€400 per year	₹31,000 per year

International students from non-EU countries are eligible for which student loans?

You can find numerous student loan providers in Germany. But, the loan options were limited for students who are from non-EU countries. The deciding factor for granting loans in Germany is the legal residence status which is connected to the nationality of the student. Below, you’ll find a series of loan options where you could be eligible and the conditions you need to meet in order to apply for a loan from the relevant providers. 

BAföG

BAföG is the short form of Bundesausbildungsförderungsgesetz - Federal Training Assistance Act. It is provided by the German state for the students to study regardless of their financial or social situation. Foreign students can also benefit from the BAföG . But, there are strict requirements for non-EU students. Those are as follows,

• You are residing in Germany or having a permanent residence EU permit under the Residence Act. 
• You are a spouse or child of the person who is employed or self-employed in Germany or enjoys freedom of movement in the EU and you are with them. 
• If you are married to German and moved to Germany, then you are eligible to BAföG
  Before getting into studies, you have already lived in Germany for five years and are gainfully employed. Training, secondary employment or summer jobs do not come under gainful employment. 
• You are eligible for BAföG, if your father and mother lived in Germany for the last of the six years and were employed in a legal manner. 

The education loan from the Federal Office of Administration

The Federal Office of Administration provides education loans for finance school education or studies. It is not only helpful for German students, but also for Non EU students. But, there are certain requirements that non-EU students should meet in order to be eligible for federal office of administration student loan.

• During the time of application, you must be the spouse or children of the German citizen or EU citizen who has the permanent right of residence.
• Before beginning your students, you should have lived in Germany at least for five years.

The KfW Student Loan

The KfW student loan is one of the well known student loan providers in Germany. It helps with your finances from 100 Euros to 600 Euros. KfW student loans support you if you are within the age range of 18-44 years old, regardless of your and parent’s income. And, there are several criterias for non EU students to get benefits from KfW student loan,

• You should be the family member of German citizen or EU citizen and must be registered in Germany
• Students need to be Bildungsinländer:innen. It refers to foreign students who have done a higher education entrance qualification in Germany or at German school abroad

Student loans from the student loan offices of the student unions

A question might arise in your mind now, is it only possible to obtain a student loan for Germany, if you are having a German school leaving certificate or German citizen or EU citizen relations. But, it is not the case, there is another possibility. You can get a student loan from the student unions in which your university is connected to. 

To get a student loan,

• You must study in a college or university which belongs to the appropriate student union groups network. 
• Financial aid should be a necessity for you. 
• You need a person who has a permanent residence in Germany to vouch for you when you apply. 
• And, the person must show proof of income as it ensures that he has gainful employment in Germany. 

Private foundations

Private foundations also help students by providing them with student loans. One of the foundations is E.W. Kuhlmann Foundation, in which they provide two types of funding. ‘Rolling scholarship’ could interest you. In order to apply for it, you should be enrolled at a German university, must complete your studies within 24 months and should plan to work after graduation.

Student loan offers from individual banks

You can get student loan offers from individual banks in your city. You do not need to have a bank account, where you want to apply for a student loan. Most of the German banks also arrange the KfW student loan. And, some banks offer student loans such as Sparkasse Herford. It depends on two factors: you should enrol at a state-recognised college or university or you are accepted for a place at university. The advantage here is that student loan is not dependent on your income and you do not have to provide any collateral. 

Various options of Education Loan for Germany

Students who are planning to study in Germany can either apply for an unsecured loan or secured loan. Unsecured loan or education loan without collateral, means the student does not have to attach collateral with a loan application. The collateral could be any asset like mutual funds, FDs, LICs or immovable property. While, in secured loan or loan with collateral, you have to attach collateral when applying for a loan. 

Educational loan for Germany without Collateral

Features	Public Banks	Private Banks	NBFCs
Example lenders	SBI, BOB	Axis Bank
Loan amount (INR)	Upto 7.5 lacs	INR 40 lakhs (For Few Selected Universities, for others only up to INR 7.5 Lakhs)
Interest Rate Range	10%-11%	11.25%-12%
Processing Fees (INR)	No	INR 15000+GST if loan amount <=20 lakhs And INR 750 on each 1 lakh above 20 lakhs
Payment During Study Period	No	Simple Interest
Moratorium Period	Course period + 6 months	Course period + 12 months	Course period + 12 months

Educational loan for Germany with Collateral

Features	Public Banks	Private Banks	NBFCs
Example lenders	SBI, BOB	Axis Bank	Avanse, Incred
Loan amount (INR)	Upto 1.5 crore	Upto 60 lakhs	Upto 50 lakhs
Interest Rate Range	8.85%-10.25%	11%-13.5%	12%-14%
Processing Fees (INR)	NR 11800 + Property Evaluation Charges	INR 15000+GST if loan amount<=20 lakhs And INR 750 on each 1 lakh above 20 lakhs + Property Evaluation Charges	1-2% of the loan amount
Payment During Study Period	No	Simple Interest	Simple Interest
Moratorium Period	Course period + 6 months	Course period + 12 months	Course period + 12 months

Others factors included to process an Education Loan for Germany

Expenses

At the time of admission, the university provides documents in which you can find the fee and the entire amount required for completing the intended degree. On an average, the total cost of studying in Germany is near €11,000- €15,000 (₹8,50,000- ₹12,00,000) per year. There are several expenses students need to accommodate while staying in the country, which will be taken care of by the loan amount. The sanctioned loan amount covers, 

• Tuition fees 
• Accomodation cost
• Travel Expenses
• Book purchases, laptop and stationary
• Project work and Tours (academic year)
• Other expenses required for completing the course

Repayment Time Period

Students who have got an education loan from the public bank should repay their loan within a 10 - 15 time period. Both EMI and interest begins 6 months after the completion of the course. Students who got a loan from a private bank must pay the interest immediately after, but EMI’s begins 1 month after the completion of the course. Moratorium period differs for various loan providing banks. 

Application Processing Time

To process educational loans with collateral, public banks take 12-17 working days. And, private banks 10 - 15 days for processing education loans, while NBFCs take 10 working days. After the sanction, you will get the promissory note, in which you have to sign. Most of the time, banks pay directly to the institution or to you. 

Requirement for Co-applicant Income

For secured loans, co-applicant income is not required. But, for unsecured loans, the co-applicant income is mandatory and it differs from lender to lender. The co-applicant income should be more than 35k per month for education loan for MS in Germany without collateral. For NBFCs, the requirement is more than 25k per month. 

Reasons for Rejection

It is not sure that you will get accepted for a student loan. There are a variety of reasons for the rejection of an education loan. It could be,

• Poor CIBIL score
• Incomplete documentation
• Low co-applicant income
• Can’t be able to meet the financial requirements
• Fall short in Academic Achievements
• Poor Interview skills 

Blocked Account

Generally, Blocked account means you can't withdraw money without limitations or restrictions. In the following lines, you can know about the education loan for Germany blocked account. The German government announced that you as a student must deposit upto  €10,500 approximately to the blocked account as a minimum amount of money. After reaching Germany, you need to open a student loan account in the local bank and you have to deposit in the blocked account for the entire calendar year.  You can withdraw the sanctioned monthly amount to cover your monthly expenses. 

Process to Apply for an Education loan for Germany

The process to apply for an education loan for Germany is the same for any other study abroad destinations. Germany University takes students twice in a year - January and September. First task is getting admission from the university and after that, required funds need to be arranged for educational expenses.

In India, there are banking and non-banking institutions that provide education loans at low interest rates for the qualified students to pursue their higher education in Germany. Before applying for a loan, you should keep in mind several particulars,

• You may require collateral to acquire a loan for security purposes. But it could vary.
• Normally, there would be a co-application, which could be your parent, sibling or spouse.

Eligibility Criteria for an Education loan for Germany

There are several criteria that should be met in order to qualify for an education loan for Germany.

• The student must be a citizen of india.
• The student must get admission from German Universities or colleges which are recognised by the funding institutions or banks. 
• The student needs to be 18 years of age old or student parents should apply for a loan
• The student should get an admission for the job-oriented course

Required documents for an Educational loan for Germany

Following documents are required to obtain an educational loan for germany. 

• Letter of admission from the college/University
• Loan application form filled out in full
• Documents on the cost of studies
• Identification proof
• Residence proof
• PAN details of the borrower
• Guarantor/co-borrower’s/student's bank statements
• Guarantor/co-borrower’s/student's statement of assets
• Guarantor/co-borrower’s/student's proof of income

Scholarships for Students

As you are intended to pursue your studies in Germany, scholarships help you with your living expenses. You can remove your worries about finances by getting the scholarship. You will surely get scholarships if you are qualified for that. You can try scholarship programs in Germany to manage your expenses. In the following section, you will find some of the scholarship programmes in Germany. 

Scholarship resources in Germany

The cost estimation of living expenses in Germany is around €853 per month. Some of the

 programs listed below can help you. 

• DAAD Scholarship Program
• Heinrich Böll Foundation Scholarships in Germany 
• Deutschlandstipendium National Scholarship Programme
• Konrad-Adenauer-Stiftung Scholarship in Germany for International Students
• Erasmus Scholarship Programs in Germany

Tips for choosing the best Education Loan for Germany

It is good to know several things before applying for an education loan in Germany as an international student. Make sure to follow those tips to prevent the errors. 

• Double check your loan’s processing fees
• Check the loan margin amount before applying for education loan
• Based on income tax exemptions, compare your loans
• Note the loan processing time
• Make sure to check the repayment terms
• Choosing a longer tenure can help you to plan your repayments in advance
• Apply for a loan at least three months before the visa interview 

Difference between student loan and student credit

It is important to know the distinction between the student loan and student credit to navigate you in the right direction. It could lead to confusion as most of them use this term interchangeably. 

A student loan provided for the students to cover their  living expenses such as  food and clothing expenses, study costs etc. The key thing is that money is paid out to the students in installments over a longer period of time. Some of the advantages of student loans are Repayment plan, Repayment assistance plan, a six-month grace period, no co-signer is required etc. 

In the student credit, banks or other credit providers paid out in a one-off total amount manner. Normally, it does not cover all the financial needs but it takes care of larger expenses. There are several advantages of student credit including lower interest rates, Grace periods, manageable monthly payments etc.,

Conclusion

When compared to other European countries, Germany is a relatively affordable study destination. Germany offers a wide range of programs in English and possesses a rich culture. In short, Students agree that Germany is a good place to pursue one’s education. In this article, you have learned all about the education loan for Germany. We hope it will be useful for you to reach your intended goals. 

FAQs

1. Which city in Germany is the cheapest ?

The following cities are some of the cheapest cities in Germany: Bielefeld City, Frankfurt (Oder) city, Halle City, Krefeld City, Passau city. 

2. How much does a German Student Visa cost ?

The cost of a German student visa for Indians is €75 (it's around 6,628.03 INR). After finishing the interview, you need to pay the amount through Demand Draft at the Embassy or Consulate. 

3. Is PR difficult in Germany ?

Getting permanent residence and permanent residency status will be easy if you meet all the necessary criteria, have all the required documents and successfully get through the interview.

4. Do Indian students get PR in Germany ?

Indian students can get PR in Germany only after they have completed the education. They also have to work at least two years, if they are having a German University Degree or four years, if they are having a foreign degree. 

5. How many Indians are in Germany ?

The count of Indians is around 171,895 and those who were born in Germany are 8,785.

6. Can I settle in Germany after studying ?

To become a permanent resident in Germany, you have to apply for  ‘settlement permit’ as earliest as possible after two years you received your permanent residence permit or EU Blue Card

7. What is the age limit to study in Germany ?

There is no age limit in order to apply for study programs in Germany. 

8. What jobs are in demand in Germany ?

Electronic Engineer, Computer Science and Software developers, Mechanical Engineering, Accounts Manager, Business Analysts, Civil Engineer and Architect.