The Student Loan can be taken out for 10 semesters, for a maximum of 5 months in a semester. If you are attending a combined, undivided programme, and the length of the programme exceeds 10 terms, the eligibility period is equal to the training period, but it cannot exceed 14 terms.
Your eligibility period is reduced by the number of months for which you have already been provided with the Student Loan.
You are free to choose from the available options regarding the amount of your loan.
In the 2010/2011 academic year, students attending a state-financed course can take out any of the amounts below every month:
- HUF 15,000
- HUF 21,000
- HUF 25,000
- HUF 30,000
- HUF 40,000
HUF 50,000 per month can be taken out only by fee-paying students. By choosing a higher amount you also undertake to pay a higher repayment installment later.
You can take out the loan on a monthly basis or in a lump sum every semester. If you opt to receive your loan in a lump sum, you will receive the loan calculated for the 5 months of the semester in a lump sum.
Note: According to an amendment to a government decree effective as of 13 February 2009, those with jobseeking parents, orphans, and students with one living parent who is a jobseeker, can apply for HUF 50,000 per month if they study on a state-funded course and HUF 60,000 per month if they attend a fee-paying course, for a maximum of two semesters. Read more about the topic here!
In accordance with the loan contract, we charge transaction interest on the amount of the loan paid. Interest is charged on the loan from the first day of disbursement, and you have to pay interest until you have paid off your loan.
The rate of the interest charged on the Student Loan is variable. The interest rate is established on the basis of the rules set out in the relevant Government Decree. From 1 July 2011 to 31 December 2011 the interest rate is 8.00%.
The interest rate always comes into effect on the first day of the given half calendar year. The rate of the interest is announced at least 7 days prior to the first day of the given half calendar year in the newspapers Népszabadság and Magyar Nemzet, at our website, and at higher education institutions.
One of the unique features of the Student Loan is that you are not required to start repaying as soon as you take out the loan. Instead, you can start repaying the loan only in the fourth month after your student status has terminated, or on the first day of the fourth month following your 40th birthday.
You are required to pay back the amount of the loan and the interest accrued on it. Your debt is made up of two parts, these are the principal balance and the transaction interest. Every year on 31 December we capitalise the interest not paid by the debtor in the given year.
The repayment scheme of the Student Loan system was designed to allow students to make monthly payments in proportion to their incomes.
For the first two years when your repayment obligation applies, your monthly repayment is based on the minimum wage. The amount you have to pay during this period is 6% of the minimum wage as of 31 October in the previous year.
From the third year of repayment your monthly repayment is calculated based on the income you earned two years before. In 2011 those who are at least in their third year of repayment have to pay 1/12th of the 6% of the income they earned in 2009 every month. However, those who had hardly any or no income two years earlier still have to pay at least 6% of the minimum wage in the previous year. (A different percentage applies to those who have taken out HUF 50,000 per month.)
As the amount of the monthly repayment may change every year, loan recipients are informed through a newsletter about the amount of their monthly payments in the following year by 15 December every year.
In the case of income-contingent repayment, all income data required to determine the instalment amount are provided to the Student Loan Centre by the National Tax and Customs Administration.
Calculation of the monthly amount to be paid by loan recipients who receive HUF 50,000 per month
Students who attend a fee-paying course and have taken out the highest amount of loan (HUF 50,000) at least once will have to pay every month
- 1/12th of the 8% of the minimum wage in the first and second year of repayment, and
- 1/12th of the 8% of the income they earned two years earlier from the third year of repayment
In the latter case the amount of monthly payment must be at least 8% of the minimum wage of the previous year, even if the loan recipient had hardly any or no income two years earlier.
Note: According to an amendment to a governmental decree effective as of 13 February 2009, those with jobseeking parents, orphans, and students with one living parent who is a jobseeker, can apply for HUF 50,000 per month if they study on a state-funded course and HUF 60,000 per month if they attend a fee-paying course, for a maximum of two terms. Read more about the topic here!
Please be advised that if you opt for the higher amount, you automatically agree to pay a higher regular repayment. This amount is 8% (for state-funded students) or 9% (for self-financed students) of the minimum wage in the previous year for the first two years of repayment. For the third year on, the repayment is the same percentage of their average monthly incomeof two years before (or, if their income is lower than the minimum wage, it is still the minimum wage).
You can make extra payments in addition to your regular repayment any time during your loan period. No fees are charged on advance payments. The amount of the advance payment directly reduces the principal balance of the loan, thus effectively reducing the length of the loan period.
Default interest
If your payment arrives late to our account, or you fail to make a payment, you are obliged to pay default interest .
The amount of the default interest is added to your default on a daily basis until you pay off your arrears. We suggest that you call our customer service for the exact amount before paying off your arrears.
Contract cancellation
According to the provisions of the Business Rules, we are obliged to cancel the loan contract with immediate effect :
- in the case of contracts concluded after 31 December 2002, if the amount of overdue debt reaches or exceeds the amount six times as much as the monthly payment, unless the debtor pays off his/her arrears by the deadline indicated in our written notice,
- in the case of contracts concluded before 1 January 2003, if the borrower is in default with an amount that exceeds 12 monthly repayments,
- if the borrower took out the Student Loan without meeting the eligibility criteria,
- in the case of a material breach of the contract.
Upon cancellation the loan contract is terminated, and the borrower has to pay off his/her loan in a lump sum within 8 days. If the borrower fails to pay off his/her arrears by the deadline, we transfer his/her case to the relevant authority, which will collect the debt.
Central Credit Information System (CCIS)
The national database of the CCIS stores information about clients who have breached their loan contracts, are/were in default, or have/had overdue debts. These data are monitored and used by all financial institutions, for example for the assessment of loan applications.
The Student Loan Centre forwards to the CCIS (formerly known as BAR) information about those:
- whose overdue debt exceeds the smallest minimum wage effective at the time of falling into arrears, if this amount exceeding the minimum wage has been permanently overdue for more than 90 days,
- who provided false information or used false or falsified documents upon applying for a student loan, and this is proved by official documents,
- whose data the Centre has already forwarded, but their details have changed.
The financial organization operating the CCIS keeps the borrower’s information for one year counted from the day when the borrower pays off the debt, or from the day the information is transferred, than deletes the data.
30 days prior to transferring the information we inform the client that his/her details will be entered into the CCIS, unless they meet their payment obligations. We inform the clients in writing about their data being entered into the CCIS within 8 days of transferring the data.
You can read more about the terms of your details being transferred to the CCIS in the Information material about CCIS, which you may find in the new loan application package.
