Unlike the UK and the US, the Irish government does not offer student loans. Grants are provided to students to help them cover tuition fees and living costs. Grants are available for undergraduate as well as postgraduate courses, not only from the Bank of Ireland but also from credit unions.
Bank of Ireland provides mini student loans to both undergraduate and postgraduate students.
As an undergraduate, you can borrow between €500 and €5,000 with a 5.0% APR variable rate and repayment terms of 1 to 5 years. These loans come with a 3-month repayment deferral period.
As a postgraduate, you can borrow up to €10,000 with a 5.6% APR variable rate and repayment terms of 1 to 5 years. These loans come with a 12-month repayment deferral period.
What is a student loan?
A student loan refers to a borrowed sum that helps cover tuition fees, accommodation expenses, study materials, travel and other education-related expenses. Unlike scholarships and grants, student loans must be repaid over a number of years. Interest rates and repayment periods are decided by your overall credit profile and academic performance.
What kind of loans are available to students?
Ireland does not have a national government-backed student loan system for tuition fees, and therefore you will have to rely on external funding sources. Here is how you can fund the education costs.
Student grants
The Student Universal Support Ireland (SUSI) grant is the main source of financial assistance. However, these grants are available only to eligible students. Make sure to check the eligibility criteria before applying for them. Grants can cover tuition fees and living costs.
Family help
Many students rely on parental help. It is a common trend for families to set aside education funds for their children, which are dipped into when higher degree programmes are pursued. Education savings can help cover tuition fees, accommodation, and day-to-day expenses.
Personal loans
Personal loans can be used to cover a wide range of expenses. Education is one of them. When they are used to cover education-related expenses, they are called education loans in Ireland. Direct lenders allow you to borrow a larger amount of money than the Bank of Ireland, and they also accept applications from students with a poor credit history.
However, you need to carefully research interest rates and repayment terms before finalising a deal. Personal loans from online lenders are generally expensive. They should be a last resort.
Part-time employment
Another way to fund your education is part-time employment. Part-time jobs will allow you to earn some money without skipping lectures. You can combine this extra cash with grants to cover education-related expenses. There are various freelancing platforms that will allow you to get freelance projects. Part-time jobs along with studies reduce reliance on borrowing.
How much can you borrow?
There is no one-size-fits-all borrowing sum, especially if you are taking out a loan from an online lender. Most people think that lenders lend a small amount of money, as education loans are quite expensive. Still, the loan size depends on your credit record, the lender’s policy, income and affordability, and existing financial commitments.
Lenders may be able to lend you a large sum of money provided you have the potential to repay the debt. It is vital to keep in mind that overborrowing can make financial repayments difficult. Make sure that you borrow only what you genuinely need.
What should you consider before taking out a student loan?
Here is what you should consider before taking out a student loan:
Total cost of borrowing
At the time of borrowing, you should carefully analyse how much you are required to pay off in total. Do not be fooled by the size of monthly instalments, because the total cost will continue to affect your finances in the long run.
Monthly repayments
Ensure repayments comfortably fit in your budget. A loan is an ideal option when repayments do not affect your ability to meet other essential expenses. If the repayment term is long, make sure that you have a financial plan to cover payments until the loan is fully paid off.
Alternative funding sources
Loans should be used as a last resort. First, consider other alternatives such as grants, scholarships, and savings. They do not have to be paid back. It is likely that you do not feel the need to borrow money after qualifying for grants or scholarships.
Contingency plans
It is likely that you come across some unexpected expenses. How would you deal with them? Will you be able to meet them without struggling with debt repayments? You must have answers to these questions before taking out a student loan.
What are the advantages and drawbacks of student loans?
Here are the advantages and drawbacks of student loans:
They can help you bridge the gap in education funds.
They help spread educational costs over time.
They provide access to courses that might otherwise be unaffordable.
Interest rates can be high.
Monthly repayments can be a burden if your financial condition is turned upside down.
Missed payments can take a toll on your finances.
What are the tips for managing student loans responsibly?
If you decide to borrow money, make sure that you will not struggle with repayments. Use the following tips to help
Create a realistic student budget.
Track your spending regularly.
Borrow only what you need.
Make repayments on time.
Avoid taking on unnecessary additional debt.
Build an emergency savings fund if possible.
The bottom line
If you need money to fund education, you should try to consider grants, scholarships and student loans from the Bank of Ireland. Part-time jobs can also help you cover the living cost. Student loans should be used as a last resort.
Do proper research and then choose the most affordable deal. You can consider borrowing money from credit unions as well. They offer education loans at the most competitive interest rates. You will most likely find their deals to be less expensive than loans from online lenders.
