Student Loans: The Guide - All about student loans

Taking out a student loan is often necessary to finance one's studies and meet living expenses.

At Smarto, we believe that a student loan is a true investment in your future . Like any investment, it's an important and challenging decision that deserves some thought. We offer to guide you through the first major financial decision of your life, to help you make the most of it.

🚧 Be careful: a loan must be repaid. Otherwise you risk being registered with the FICP of the Banque de France. 🚧

Smarto replaces the bank guarantor and gives you access to bank student loans. We enable all students*, regardless of their family's financial situation, to finance their studies.

How do I access a student loan to pay for my education?

• You must be of age (to do it in your name, otherwise it will be done in your parents' name).
• You must be French or be domiciled in France for tax purposes.
• You must be under 35 (or under 28, depending on the bank).
• You must be enrolled in school (have a school certificate, student card or registration certificate).
• You need a guarantor (a relative/friend living in France, with a permanent job contract and not too much debt). The guarantor reassures the banker: if you can't repay your loan, he'll take over. If you don't have a guarantor, sign up for the Smarto guarantee. You can also apply for a government-backed student loan. Check your eligibility with our service: Smarto student loan guarantee

Step 1: How much should I borrow?

We recommend that you make a budget of the expenses that will be financed by this loan. You should take into account recurring expenses (transportation card, housing, etc.) and one-shot expenses (course materials, computer, etc.). Here are some questions that may help you with your budget:

• Do you need to finance your tuition? How much will it cost throughout my entire course of study?
• Do you plan to include your daily expenses (food, etc.)?
• Your accommodation?
• How much does it cost to get to class (public transportation, car, ...)?
• Supplies (computer equipment, books, etc.)?

You can also add a little security (between €500 and €1,000) for the unexpected.

What is the maximum amount you can borrow for a student loan?

The maximum amount you can borrow varies from bank to bank and can reach 120,000€ (🤑). It is rare that students borrow this much, but in some cases it is necessary (MBA, business school, stay abroad...). We advise you to make a credit that corresponds to your need and not to the maximum of your repayment capacities.

Student loan interest rate?

The interest rate generally varies between 0.8 and 1.5% depending on the bank.

Are there any other fees when taking out a student loan?

Depending on the bank, there may be application fees and additional insurance fees. In any case, you will also have to open a bank account in the concerned establishment.

When will you get your money?

The payment of the student loan is only made after the legal retraction period of 14 days, to which must be added the time required by the bank: opening of the account, simulation, submission of the file and analysis... It takes at least one month.

When do I start repaying?

A loan must be repaid, but the main characteristic of student loans is that most of them are deferred for repayment after the end of one's studies.

Step 2: Contact the banks

We recommend that you check with your school to see if they have partnerships with banks. If so, you may be able to access preferential rates.

We recommend that you contact 2-3 banks (in addition to your current bank) and compare their offers (online simulator for example)

🚧 Be sure to ask about all fees (application fees, interest rates and the amount of loan insurance) 🚧

Banks that offer credit to students?

All the major traditional banks offer to lend money to students at preferential rates. To avoid mentioning them all, here is a list of the main ones: BNP Paribas, Crédit Agricole, Société Générale, the BPCE group (Banque Populaire, Caisse d'Epargne, ...), the Banque Postale, Crédit Mutuel ...

Student Loan Insurance

The loan insurance covers you in case of death, disability etc. It should not cost more than 0.3% of the annual loan. It remains an option. In general, the price of this insurance can be negotiated.

How can I reduce my bank fees with my student loan?

• Some banks have packages for students with a credit card offer and free (or reduced) services. These offers are advantageous for students but are never mandatory.
• Some banks also allow you to borrow in envelopes. This is advantageous because you will pay less interest.
  Ex: If your school costs 5,000€ per year over 3 years and you only want to cover your tuition fees, this arrangement allows you to borrow 5,000€ per year over 3 years instead of 15,000€ all at once.

If you change banks for your student loan, the advisor will ask you to open a current account at your new bank.

Step 3: Assemble the file and sign it in the agency

Once you have compared the offers, make an appointment at the agency to prepare the file.

You will need at least one appointment to open the account and get a simulation. And another appointment to sign the loan contract in the presence of your guarantor.

Before you go to the agency, you should at least know how much you want to borrow and how long you want to pay it back.

You also need to bring your receipts which may need to be completed depending on the bank:

• identity card
• your last 3 bank statements
• your school certificate and proof of address (e.g. EDF bill).
• For your guarantor, he will ask for more supporting documents (tax notices, loan schedules, pay slips, etc.).

Once the simulation is completed and before signing during the second appointment, you will be provided with :

• The loan contract (so that it can be read in advance).
• The amortisation table (which will show how much you will pay in monthly instalments and when you will start repaying).

For the signature of the loan you will have to go to the branch with your guarantor. The advisor will be there to guide you and answer all your questions.

Once the contract is signed, you have a 2 week withdrawal period. We advise you to read the loan and insurance contract again. After 2 weeks, if you do not change your mind, the money will be transferred to your account.

If you find the amount of your loan too high, there are alternatives. Indeed, you can try to increase your income by doing freelance missions during your studies, by taking a student job or by doing a work-study program.

What if I don't have a guarantor for my student loan?

If the bank refuses you a student loan because you don't have a guarantor, you have three options.

The state-guaranteed student loan

The state-guaranteed student loan is a student loan that is granted by a partner bank (Société Générale, Crédit Mutuel, CIC, Banque Populaire, Banque Postale, Crédit Agricole, BFCOI and Caisse d'Epargne) and whose guarantee is provided by the Banque Publique d'Investissement (BPI)

Who is concerned?

What are the conditions for obtaining

• Be enrolled in a French institution to prepare for a competitive examination or a French higher education diploma (university diploma, BTS, business school, engineering school, etc.).
• Be over the age of majority and under 28 on the date the loan is taken out (an emancipated minor can also apply for a government-guaranteed student loan).
• You must be a French national or a citizen of a member state of the European Economic Area (EEA): Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, provided you have lived in France continuously for at least 2 years.
• Be enrolled in an establishment in France to prepare for a certification, competitive examination or French higher education diploma (university diploma, BTS, business school, engineering school, etc.).

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How to obtain a state guaranteed student loan

All you have to do is submit your application to the bank concerned, which will then take care of obtaining a guarantee from BPI FRANCE. Despite this guarantee, the bank may still refuse the student loan, in the case of overindebtedness for example.

Characteristics of the state-guaranteed student loan

1. No means test, no deposit required: guaranteed by the state
2. Maximum amount of 20,000 euros and a minimum credit period of 2 years

The Smarto guarantee

If you are not eligible for a state-guaranteed student loan or if the content does not suit you (duration, amount), Smarto is there for you.

If you have any questions about student loans, don't hesitate to contact us.

Student personal loan, online

Another solution, if you don't have a guarantor, is to subscribe to an online student loan. This is more of a personal loan at a preferential rate for students, but it may help you meet your expenses.

Is a zero-interest student loan possible?

Some institutions offer a zero interest loan to finance your studies. It is quite rare and it is marketing. Nevertheless, the amounts can sometimes meet your needs, and it's always worth it...

A zero interest loan means that only the capital will have to be paid back (and the insurances if there are any), but not the interests which are zero by definition.

Our advice for getting a student loan:

• Assess your needs (tuition, living expenses, transportation, computer, housing, etc.) and find out about any assistance you may have before you borrow.
• Pay attention to the amount of monthly payments due during the repayment period (ask for a simulation during your first appointment): we recommend that you extend the duration of your loan if your monthly payments represent more than 25% of your salary at the end of the program.
  ex: If you think that you are going to earn 2000€/month net at the end of the program.We recommend that your monthly payments do not exceed 500€/month so that you can cover your other needs (housing, transportation, food etc.).
• Have several banks on the phone to compare their offers.
• Ask your school if it has partnerships with banks (with more attractive offers).
• Ask for the rate of the loan insurance (it is not compulsory but strongly recommended and varies greatly from one bank to another).
• Ask to start repaying the loan only 6 months after you finish your studies (to give you time to find a job).

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* as of August 1, 2024, the service is open to students who are nationals of the European Union, resident in mainland France and enrolled in one of the Grandes Ecoles belonging to the Conférence des Grandes Ecoles.

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