Students receive their study loans in parts

TALLINN - The Estonian Finance Ministry and three of Estonia's banks have finally found a solution for funding student loans.

The clients of Uhispank, ERA Pank and Hansapank have agreed to lend money at a 14.5 percent interest rate without extra deposits to the bank so that they would not have to lend the money out at once. According to the agreement, students receive their loans in two parts, 6,500 kroons ($464.2) on Sept. 15 and the same amount at the beginning of next semester on Feb. 1.

Students entering universities for the first time receive their loans half a month later due to possible problems with missing data.

According to Hansapank manager Indrek Neivelt, the decision is positive for those who spend their money monthly and will save a little on interests and negative for those, who are interested in taking out the money at once to buy a car.

The agreed-upon interest rate would be 4 percent higher for the government and will remain the same for the students, which has been constantly 5 percent during the last years.

"The 4 percent rise in interest rates is agood idea because the interest rates have increased a lot and there is not much choice left," said the Federation of the Estonian Students Unions, who previously accused Hansapank for too high claims.