September 22, 2022

Repayment of study abroad loans and SU loans easily explained

Repayment of study abroad loans and SU loans easily explained
by
Deni Isic

The study abroad loan runs on the same terms as the SU loan

First things first, the study abroad loan can only be used to pay the difference between the amount you receive in the study abroad scholarship and the tuition fee abroad. You can take out the SU loan on top of the study abroad loan even if you are abroad, if the study stay just needs to be sweetened a tooth more. Now that we have it in place, we can move on to the repayment rules themselves.

There is a difference in the interest rates on the loans depending on whether you are a student or a graduate, one thing is however, for sure, and that is that the loan bears interest from the month it is taken. But what is the difference between the interest rates on the Study abroad and SU loan?

The rates for your interest rates

Your study abroad and / or SU loan bears interest on 4 percent per year from the month you receive it until you finish your education. From here, your SU loan bears interest at the discount rate + 1 percent per year. The discount rate is the interest rate set by Danmarks Nationalbank, and it is therefore Danmarks Nationalbank that determines the interest rate on your SU loan when you have finished studying.

The discount rate has been 0 percent since 2012 and therefore the interest rate for repayment of SU loans is 1% after graduation.

When can I start paying?

You can pay back on your SU loan from the day you got it. However, most do not pay back until one year after completing their education and getting a job. You typically pay a fixed amount every month or every other month, but you can also choose to pay back a larger amount of your loan at one time.

You repay the SU loan with Udbetaling Danmark

It is Udbetaling Danmark that is responsible for the repayment of your student debt and it is to Udbetaling Danmark that you repay your SU loan. Payment Denmark is part of the ATP Group and it is on borger.dk that you can find information about your loan. Here you can see both how much you owe, your installment plan and how much interest is credited to your loan. It is also here that you can request a deferral of your payment.

Loan example

An example of what a 12-month SU loan costs:

Josefine chooses to take out a SU loan for 12 months, which with the monthly SU loan rate of DKK 3,234 (2021 figures) ends with a total loan of DKK 38,808 before interest.

You have 7-15 years to repay your SU loan, depending on how much you owe.  

  • Interest accrual during the education (12 months): 4%

  • Interest accrual in the months from graduation in June 2021 to January 2023 where the repayment begins (17 months ): 1%

  • Interest accrual during the repayment period of 7 years: 1%

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Although the period between June 2021 where Josefine graduates until January 2023 is not obliged to repay the loan, the interest rate of 1% per year after graduation is still credited.

Josefine has up to 7 years to pay back. If Josefine follows the repayment agreement, she must pay DKK 1,016 back on the loan every other month for up to 7 years. Josefine must thus pay back a total of DKK 42,688 after 7 years when the loan and interest are added together.

 

Therefore, the loan of DKK 38,808 before interest ends up costing DKK 3880 in interest over a period of 7 years. However, it should be mentioned that the interest rate would have been higher if she had taken the loan before 1 year before graduation, as the interest rate on the SU loan is 4% annually when you are studying.  

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