There are many students who owe money through consumer loans and mortgages, but there is another option that is preferable if one wants more financial freedom in everyday life. Here are some of the benefits students can enjoy if they invest in SU loans over other options.
Danish young people receiving SU can usually also apply for a loan
An SU loan is not like other types of loans that you can otherwise take in the bank or online. For example, you are not asked how the money is to be spent or what you want to provide as collateral, since it is assumed that the loan is for pure consumption, and you know that there is nothing concrete to provide for a security beyond your young age. So, as a student, if you want more freedom and time, an SU loan can be a really good alternative to a student job, and certainly better than expensive consumer loans in the bank, or quick loans at online banks.
Not having to meet many requirements to get the loan approved
there is also the advantage that SU loans are often much cheaper compared to ordinary loans in the bank. An SU loan is often at an interest rate of approx. 4% annually, during the time you are a student. A typical consumer loan in the bank can easily be at an interest rate of between 7% and 13%, and at other online banks, you can risk an interest rate of around 20% if you are very unlucky. So if you look at the interest rate alone, it might be a good decision to choose SU loans over the other loan options. In addition, you only have to pay interest on the amount that is paid on an ongoing basis. So even if you plan to borrow 100,000.00 – for example, you only have to pay interest on the amount that you are paid on a regular basis. This is not normally the case with ordinary loans, where you pay interest on the entire amount immediately, so that the interest rate is to a much greater extent something to include in your accounts.
Another benefit of SU loans
Another benefit of the SU loan is that one does not have to start repaying until the study has ended. In fact, the repayment must only begin on January 1, one year after the end of the year in which you completed your education. This means that you probably have a good opportunity to find a job before you start paying back.
However, just remember that SU loans differ from other loans in that you cannot get a large amount of money paid out at once. SU loans are paid out in small sums on an ongoing basis, with the maximum in 2013 being 2.943, – per month, so this is not the solution if you want a large amount paid off quickly.
A little unusual, it is actually pointed out by Nordea’s consumer economist Anne Lucas that there can be great advantage in borrowing money through SU loans even if one does not stand and need the money. You just have to put them aside and leave them until you finish your studies. You may think that you should not borrow money you do not need, but if you know you will spend money on an apartment when you finish studying, then you can just as well finance it, by the cheapest loan solution available. This may be an opportunity future and current students may want to consider before embarking on other more expensive loan solutions.