IE maintains two loan programs, one with Banca March (www.bancamarch.com) and a second with Caja Madrid (www.cajamadrid.es). Both programs provide an additional option for program financing, for qualifying students. Neither program is to be considered a “guaranteed loan program”, but instead students (both fiscal residents in Spain and international) with qualifying credit profiles may access partial program funding through either institution. Do also see the comment at the bottom of this post with regards to “guaranteed” loan programs.
While our Banca March agreement was been functioning normally and without interruption, we’ve seen extended delays in the resolutions provided by Caja Madrid. The reason we’ve seen delays in the resolutions is that IE and Caja Madrid have been renegotiating the terms of the agreement, and given the complicated financial situation, both institutions had to think about how best to continue to serve IE students while maintaining a sustainable loan program for the funding institution – Caja Madrid. The situation was aggrevated by the fact that negotiations fell during the month of August and September.
While Financial Aid has been working hard to process applications as quickly as possible, we’ve unfortunately not been able to provide detailed information until today. Effective immediately, the Caja Madrid loan offer now has the following characteristics:
1) Loan Period: Up to 8 years repayment period.
2) Grace Period for Full Time Students: Up to 18 months.
3) Maximum Loan Value: 45.000€ for Spanish fiscal residents, 30.000€ for non-Spanish fiscal residents/international students.
4) Interest Rate: Euribor + 3,75% (Up to date 12-month Euribor rate information: ENGLISH / SPANISH)
5) Other Fees: 0,30% commission on loan signing, notary fee (based on loan value) and annual account fee.
6) Accident insurance must be purchased by all Caja Madrid loan customers (policy cost based on loan value).
Today we’ve started communicating approved Caja Madrid loans to IE students. Please keep in mind that one of the concessions we obtained from Caja Madrid was that during the negotiation process they would communicate at a minimum those cases that did not pass the institution’s risk assessment process, so that students who were not approved would at least have the time to make alternate program funding plans. Caja Madrid could not communicate approved loans until now because that the applicable loan conditions were under negotiation.
While we understand it can be disappointing when a loan is not granted, we do make it clear from the beginning of both the admissions and loan processes that these loan programs are only one of many options the student should consider when building their financial plan, and that funding, if provided by Caja Madrid or Banca March, only ever covers a portion of the tuition fees due. Aligning the financial resources necessary to fund program tuition and living expenses is ultimately the responsibility of the student.
For additional information on Financial Aid and how to build a solid financial plan, attend one of our many information sessions (see the annual agenda here) held at least monthly, every month from September to July.
Guaranted loan programs aren’t always what they seem so be sure to read the fine print: some institutions are willing to offer a guaranteed loan only when the student purchases expensive payment protection insurance or when the student provides a bank guarantee (that is, the student must lock-in an amount of funds equal to the loan value at a bank until the loan is paid back in full – a costly proposition…) The best option really is to take out a loan with your local financial institution and in local currency, however we do provide two potenial options if you don’t have a lending institution able to lend you funds. But again, students must successfully complete the loan application and risk evaluation process before obtaining a loan through Caja Madrid or Banca March.