How do you get a student loan in Switzerland?

Studienkredit Schweiz

A student loan is a loan that is used specifically to cover educational costs. Student loans in Switzerland are characterized by advantageous loan conditions, including low interest rates and flexible repayment terms. The aim of these loans is to ease the financial burden during education.

The cantons issued between CHF 15,000,000 and CHF 27,000,000 in student loans per year between 2010 and 2022, according to the Federal Statistical Office. In the same period, spending on scholarships amounted to between 300,000,000 and 370,000,000 francs per year. Both expenditures together normally correspond to around 1% of total public education costs in Switzerland.

In contrast to scholarships, student loans are subject to repayment, sometimes including interest. The requirements for scholarships are stricter and depend on family income.

The requirements for a student loan are similar to those for a personal loan, but no employment is required. You must be of legal age and have a positive credit check.

The advantages of student loans are the financial support and the flexible repayment options. Disadvantages include the debt burden after the end of studies, possible restrictions on the choice of educational institution, and the risk of still being obliged to repay the loan if you drop out.

Student loans are mainly issued by the cantons. Some regional banks and private lenders also issue student loans, although the latter have higher costs.

What is the definition of a student loan?

A student loan is a particular form of loan specifically intended to finance educational costs. A student loan enables students to finance their education by providing the necessary funds for tuition fees, teaching materials, living costs, and other study-related expenses. In Switzerland, student loans (also known as educational loans) differ from other types of loans due to their favorable conditions and repayment terms. The aim is not to make a profit but to minimize the financial burden during the study period.

A key feature of student loans is that repayment is often deferred until after graduation. This allows borrowers to concentrate fully on their studies. Repayment plans are usually flexible and take into account graduates’ potential income after graduation.

What is the difference between scholarships and student loans?

The difference between scholarships and student loans is that scholarships usually do not have to be repaid. Only certain cantons require repayment if you later become very wealthy. In contrast, student loans must always be repaid, sometimes plus interest.

Studentloan Scholarship Difference

The requirements for scholarships are correspondingly stricter than for student loans. For example, you will not receive a scholarship if your parents are financially well off.

What are the requirements for a student loan?

The requirements for a student loan are not incredibly different from those for a personal loan. Of course, you can only get a student loan if it is used for education at a college or university.

The lender’s requirements vary depending on where you apply for the student loan. For example, some banks require that you attend a specific university, while the cantons are usually more generous. The following requirements or similar typically apply to cantonal scholarships or student loans. Research the specific requirements of your canton of residence. Here is an example from the canton of Zurich.

  • The place of residence under scholarship law must be in the canton of application.
  • Applicants must come from a family with modest financial circumstances.
  • Applicants must be completing a state-recognized education.
  • Applicants must be under 45 years of age.

Employment is not a prerequisite for approval of a student loan, unlike conventional loans in Switzerland, which are generally only granted to earning people. Being of legal age and having a credit check is a legal requirement, as with any loan.

Can foreigners get a student loan or scholarship in Switzerland?

Yes, foreigners can also obtain a student loan or scholarship in Switzerland. In addition to Swiss nationals, cantonal student loans and scholarships are also awarded to refugees and foreign nationals living in Switzerland, as well as to Swiss nationals living abroad (Swiss abroad). In addition, there is a federal program called the Federal Commission for Scholarships for Foreign Students (FCS), which awards federal excellence scholarships for foreigners. The following video explains the FCS.

Apart from the cantons and the federal government, other organizations also offer student loans for foreigners. More on this further below.

How do you apply for a student loan?

Applying for a student loan in Switzerland is similar to applying for a scholarship. First, you need to find out whether you are eligible for a cantonal loan. If you can get around a bank or other credit institution, it is definitely worth it, as the cantons give loans with much lower interest rates. Depending on the canton and situation, interest-free loans are even available.

If you do not qualify for a cantonal loan, the next step is to look for regional banks that offer specific student loans or apply to the alternative providers listed further below. If that doesn’t work out either, you will have to take out a normal loan, i.e., a personal loan, which involves much higher interest rates.

How do student and personal loan applications differ?

There are two main differences between requests for student loans and requests for personal loans. The first distinction is the lender: In most cases, the federal government or cantons are the ones who provide student loans. The second difference is the proof of income: In contrast to personal loans, no income is required for student loans.

What are the advantages and disadvantages of student loans?

Student loans provide financial assistance that frees students from financial worries and allows them to focus entirely on their studies. The biggest advantage over normal loans is the flexible repayment structure, as the loan usually only has to be repaid after graduation. Another major advantage is the low interest rate. In addition, there are fewer clichés associated with a student loan than a consumer loan.

The disadvantage of taking out a student loan is starting your professional life with a debt burden, especially if the job market is volatile or the starting salary is lower than expected. The interest and possible additional costs increase the overall burden of education. In addition, loan conditions such as restrictions on certain educational institutions or degree programs can limit the flexibility of study choices. The worst-case scenario is if you don’t complete your studies but still owe the loan amount.

What are the costs and fees?

Interest rates vary depending on the lender. They are particularly favorable for cantonal loans, sometimes even interest-free. For private education loans, interest rates are normally between 4% and 12%. Cantonal loans offer interest rates of 0% to 12%.

Late fees are charged for late payments. There is the possibility of processing fees to set up the loan. Some loans also include costs for early repayment of the loan amount. It is, therefore, advisable to carefully compare and understand all terms and conditions before signing a loan agreement.

Who offers student loans in Switzerland?

Most student loans in Switzerland are issued directly by the cantons. You submit your application on the same website where you apply for scholarships. Here, you will find an overview of the websites of the cantonal scholarship offices that also grant student loans.

In Switzerland, specialized student loans from banks are a relatively new and not yet fully established option. Some regional banks offer student loans, but often with the condition that the borrowers are enrolled at specific educational institutions, such as Rapperswil University of Applied Sciences for Bank Linth. The Valais Cantonal Bank also offers a student loan that is specifically intended for students.

Alternatively, there is the foundation “Educa Swiss”, which arranges student loans, and the company Splendit, which organizes student loans in the form of peer-to-peer loans.

Otherwise, of course, there is always the option of a personal loan, which can also be used to pay for studies. But here, higher costs have to be accepted, and at least part-time employment is required. Our lender comparison will help you get an overview.

What are the legal framework conditions?

In Switzerland, student loans are mainly regulated at the cantonal level, meaning the exact conditions and regulations vary from canton to canton. In the case of personal loans, the law on consumer credits applies.

Like any Swiss contract, loans are subject to the Swiss Code of Obligations, which covers the general provisions for loans, including contractual obligations and the consequences of non-compliance. The processing of borrowers’ data must comply with the Data Protection Act. Before a loan is granted, a credit check is required to ensure that the borrower can repay the loan.

Repayment terms are set out in the loan agreement and must contain clear information on interest rates and deadlines.