Student Loan : How does zero rate loan work?

The Tauz Zero Student Loan is designed for students who are looking for sources of funding for expenses during the year, including tuition, food, transportation and housing. It's true that financing expenses for all of these items is not very practical, especially when you're a university student. So there are several options that are available and that can be adopted. The one that turns out to be more favourable for a personal student loan is the "zero interest rate loan". However, before taking out a loan, it is always essential to compare the offers offered by the institutions in order to benefit from the best service.

What is the zero-rate loan?

As indicated by its name, the interest-free loan is a consumer credit offered to students, allowing them to make an interest-free loan. More specifically, no fees or additional charges are payable to the bank by the student borrower at the time of repayment. There are no more application fees to be paid. It should be noted that the amount of the loan as well as the term of the loan can be modified from one structure to another, however the amounts offered for a zero-interest loan are mainly low. In this regard, this type of credit is very accommodating for students who need immediate financial support. This is the case when funds are needed for overseas travel, for the purchase of supplies, or for more minor expenses. Because of its ease of implementation, the interest-free loan is not very common, but this does not prevent several banking institutions from offering it. This tauz zero student loan is subject to certain conditions. To qualify for the right to an interest-free student loan, the age must be between 18 and 28 years old. The student must be enrolled in an institution of higher education.

Types of interest-free student loan offers

For the financing of your studies, it is possible to turn to banks that offer and propose several different tauz zero student loan structures. In France, BNP Paris Bas is one of these banks that offers an interest-free loan. Repayment is over 12 months, but the maximum amount that can be granted is limited. Another option is to approach the Caisse d'Epargne, which offers a higher ceiling for a longer repayment period of 36 monthly payments. Crédit Agricole's Regional Banks, on the other hand, offer very large capacities up to around EUR 5,000. Société Générale and LCL as well as Crédit Mutuel can also be merged. Another interest-free loan option is also offered by the State in the event of a need for financial assistance to obtain permits, including the "one-euro-a-day permit". However, it should be pointed out that this offer is not feasible only for certain driving schools.

Procedures to be followed

In order for the interest-free student loan to be granted, a few procedures must be followed and adhered to. The first step is to contact the appropriate institution with which you want to take out a loan to apply for a loan. The bank or financial institution you approach will first analyze and will ask you to provide certain files that it will analyze in order to assess your creditworthiness. It will determine whether the applicant is capable of repaying the loan within a set period of time. As soon as the case is studied and the application for an interest-free loan is granted, a contract will be drawn up and finalized. Generally, the documents to be provided by the student are: a valid identity document, an up-to-date residence certificate, proof of student status and a bank statement. The student should also present a guarantor to the Bank and the guarantor must also provide proof of identity, domicile and specifically proof of income. The presentation of a guarantor is mandatory. However, in one case, an option is presented including a state-guaranteed student loan, but this time it will be with interest.

The method of repayment of a zero-rate student loan

Once you have chosen the Bank, it is essential to determine the duration of the loan, the amount and the monthly payments. When the credit agreement is signed, the terms and conditions for repayment must always be fixed. It is a loan that the student has to return on a term determined by the bank. The maturity can be monthly, quarterly or half-yearly. However, it is quite possible for the student borrower to repay the entire amount of the loan in a single payment. Also, he or she can begin repayment before the due dates that have been predefined in the contract.
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