Default interest
If your repayment installment 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.
Termination of contract
According to the provisions of the Business Rules, we are obliged to terminate the loan contract with immediate effect:
- with regard to contracts concluded after 31 December 2002, if the amount of overdue debt reaches or exceeds an amount six times greater than the monthly payment, unless the debtor pays off his/her arrears by the deadline indicated in our written notice,
- with regard to 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 event 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 one 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 constantly overdue for more than 90 days,
- who provided false information or used false or falsified documents when 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 organisation operating the CCIS keeps the borrower’s information for one year, counted from the day when the borrower paid off the debt, or from the day the information is transferred, then deletes the data.
We inform the client 30 days before transferring the information 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 about the CCIS, which you may find in the new loan application package.
The amount of the repayment installment may change from year to year and is valid until December 31 of the specific year. The Student Loan Centre informs all its clients about the amount of the current repayments in a newsletter by December 15 of the previous year.
The first two repayment years
For the first two years when your repayment obligation applies, your installment is based on the minimum wage. The amount you have to pay for this period is typically 6% of the minimum wage of October 31 of the previous year.
Students in the self-financed scheme who ever received the highest loan amount (currently at HUF 50,000 a month) available only to them shall, for the first year of their payment obligation period, pay each month 8% of the minimum wage of October 31 of the previous year.
Important: the first two years of your payment obligation period means that if you started to make your payments beginning in October 2008, you enter the third payment year on 1 January 2010, from which time your payment is based on your income.
From the third year of repayment
As a rule of thumb, from the third year of repayment your repayment is calculated based on your income of two years before. For instance, your monthly repayment in 2009 will be 6% of your gross average income in 2007 (including all taxable income such as bonuses and rewards). If your average income in 2007 was less than the minimum wage, your monthly repayment in 2009 equals 6% of the minimum wage.
Students in the self-financed scheme who ever received the highest loan amount (currently at HUF 50,000 a month) available only to them shall pay 8% of their average monthly income of two years before. If their average monthly salary was lower than the minimum wage, their monthly repayment equals 8% of the minimum wage.
All income data required to determine the repayment amount are supplied to the Student Loan Centre by the Tax and Financial Control Administration.
Note:
In accordance with the amendment of a government decree effective 13 February 2009, those clients whose parents are job seekers, or they themselves are orphans or have a single parent and the living parent is a job-seeker, may request for up to two semesters a monthly amount of HUF 50,000 under the state-funded scheme or HUF 60,000 under the self-financed system. Read more about the topic here!
Those who took the opportunity to request a higher amount also agreed to make a higher repayment. This amount is 8% (for state-funded students) or 9% (for self-financed students) of the minimum wage of October 31 of the previous year for the first two years of repayment. For the third year on, it is the same percentage of their average monthly income of two years before (or if the income is lower than the minimum wage then it is still the minimum wage).
In order to mitigate the unfavourable impacts of the world economic crisis, those paying off their Student Loan from their salary and thus are at least in the third year after their repayment obligation began and who do not make a repayment based on the minimum wage have the option to request a reduction in their repayments from the Student Loan Centre. Only those whose contract is terminated, by law, by the Student Loan Centre are not eligible for this option .
The Student Loan Centre may authorise a lower instalment for a maximum period of 24 months without examining the reasons for such a request. The amount of the reduced repayment instalment may vary from person to person depending on the loan amount, and may not be lower than the minimum repayment instalment amount specified for the current year on the basis of the minimum wage of October 31 of the previous year (defined on the basis of 6, 8 or 9% repayment ratio).
To request a reduced repayment installment amount, log in to Student Loan Direct . The application or the downloaded and completed form needs to be printed, signed and mailed to the Student Loan Centre (Diákhitel Központ 1996 Budapest).
Important: as a result of lowering the repayment installment amount, your Student Loan period may increase, which extends the repayment period.
Advance payments
During the repayment period, you can transfer extra amounts in addition to your regular repayment at any time. You can make advance repayments without any restrictions or with any fees applied.
Note: An advance repayment does not releases you from the obligation to make your regular repayment.
As a rule of thumb, the amount of the advance payment directly reduces the principal balance of the loan. We are entitled to deduct the amount against any outstanding, overdue debt by the client and reduce the principal balance only by the remaining amount. Any advance repayment is accounted on the day the amount is received to our bank account.
Advance repayment is only possible through a separate bank transfer but it may go to the same bank account (bank number 10032000-01800126 of the Student Loan Centre). When filling out your transfer order, always write “advance repayment” and your 8-digit contract number in the comment field.
Prepayment
If an amount exceeding the amount of the regular repayment is paid not in accordance with the rules relevant to advance repayment, i.e. the words “advance repayment” are missing in front of the contract number, the excess amount is considered as prepayment and is primarily accounted for fees and interest and the principal balance is only reduced by the remaining amount.
By prepayment you also pay your installments due at a later time. It means that the specific repayment amount is divided by the amount of the regular repayment and that indicates how long (how many months) a forbearance is provided by the current repayment before your obligation to pay your repayment installments resumes.
After this forbearance, you continue to be responsible for transferring the monthly repayment amount to our bank account.
Prepayment may come in handy for someone with irregular income and when transferring the regular repayment by the deadline each month causes some difficulty.
Example: if your regular repayment is HUF 10,000 and transfer HUF 100,000 as prepayment, your outstanding debt is reduced in the order of fees, interest and principal and you are exempted from the obligation of regular repayment for a period of 10 months. If, however, you transfer this HUF 100,000 amount as “advance repayment”, it directly reduces your principal balance but it does not exempt you from making your regular repayments.
You need to fulfil your repayment obligation, even if you live abroad.
When repaying from abroad, please remember to make your payments in Forints (HUF), the legal Hungarian currency. In order to make your payment in the amount as specified in the balance statement letter, please keep in mind that the client must bear the fees related to fulfilling the repayment obligation. Please be advised that by December 15 of each year we send a statement regarding the amount of the instalments due the following year to the registered delivery address (person authorised for deliveries).
How must I repay?
Always make sure you indicate your 8-digit contract number in the notice field of the transfer order. If you transfer the amount from a current account managed abroad, you need to indicate that you, as the sender, agree to cover all costs related to the transfer. When initiating your transfer order, please bear in mind any change in the currency exchange rate.
You will need the following codes when making your payment from a currency account managed by a foreign bank:
Repayment:
IBAN: HU48 1003 2000 0180 0126 0000 0000
MNB Swift code: MANEHUHB
Early payment:
You need to enter the word “előtörlesztés” (early payment) in the notice field of the transfer order.
Repayments can only be made by bank transfer. Please transfer your repayment installment to bank account number 10032000-01800126 of the Student Loan Centre.
Make sure you enter your 8-digit contract number in the comment field of the transfer order. Without the contract number, the Student Loan Centre cannot identify the payer and will consequently transfer the amount back to the account it came from.
We recommend you give a standing order to your bank to avoid having to remember to transfer the installment in time each month.
In addition to the regular repayment, you also have the option of advance repayment. To do that, please follow the instructions outlined in the chapter entitled “How to initiate an advance repayment?”
Deadline for repayment
The monthly repayment should be received at the specified bank account of Student Loan Centre by the 5th day of every month.
We recommend that you take into account the time delay due to the bank transfer and transfer the amount a few days early to ensure that it is received by the 5th day of the month.
The consequences of late payment are discussed in the chapter entitled “What happens if I fail to make a repayment?”.
The Student Loan offers a unique opportunity in that repayment of the loan does not begin immediately.
In accordance with the General Terms of Business, you need to report when your student status ends. If you have a Student Loan Direct Account, your can submit the form electronically to Student Loan Centre.
Without any preliminary notice, you are required to start repayment of the loan:
- on the first day of the 4th month after your student status ends.
- on the first day of the 4th month after you turn 40.
Repayment information
This chapter answers questions about repayment, failure to pay your installment and early payment.
Benefits
Borrowers of the Student Loan are entitled to certain benefits. No repayments are due for the period in which you receive some form of maternity leave payment (TGYES, GYES, GYED) and the state covers the payment of interest for that period. Those eligible for a disability pension, disability allowance, or an accident-related disability pension are not required to pay their installments.
