13.10.2026
As at the start of October, LHV had paid out over €7 million in student loans to more than 1,300 students. Compared with the same period last year, the volume of student loans issued has tripled, and the number of applications has risen by 90 per cent.
Catlin Vatsel, Head of Retail Finance at LHV says that one of the main reasons for the rise in demand is a change that came into force this year, following which a guarantor or collateral is no longer required to obtain a student loan. ‘It is very clear that the changes to the terms and conditions of student loans have had an impact. Previous years have not seen such a sharp rise in demand for student loans’, said Vatsel.
Most student loan borrowers take advantage of the opportunity to borrow the maximum permitted amount, namely €6,000. The average amount of new student loans taken out this year is approximately €5,400.
According to Vatsel, students generally prefer to withdraw the required amount in one go, rather than spreading it across several disbursements throughout the academic year. ‘Student loans are often used to cover major expenses incurred at the start of the academic year, such as rent and other living costs, tuition fees, a laptop, or other equipment needed for studies. When you go abroad to study, there are often additional costs associated with moving, a security deposit, and settling in’, explained Vatsel.
The proportion of students studying abroad is increasing
Judging by this year’s applications, there has been a significant increase in the number of Estonian students studying abroad. ‘The removal of the guarantor requirement will have the greatest impact on those for whom finding a guarantor was previously difficult. We see this particularly clearly in the case of students studying abroad’, said Vatsel.
According to her, the rise in lifelong learning is also reflected in student loan applications. Although 80 per cent of this year’s borrowers are aged 18 to 35, one in five student loan borrowers is aged between 36 and 70. 'Learning has long since ceased to be the preserve of people in their twenties. The fact that one-fifth of our student loan borrowers are over 35 years old illustrates quite well just how common it has become to study later in life’ noted Vatsel.
73 per cent of applications received an automatic positive decision
In addition to the terms and conditions of student loans, the application process has also become quicker. This year, 73 per cent of all applications received an immediate positive automated decision.
‘When a person receives a positive decision, the vast majority go on to sign a contract. Around 13 per cent of those who receive a positive decision nevertheless decide not to take out the loan’, said Vatsel.
Twelve per cent of applicants received a negative decision. The main reasons for rejection relate to failure to meet the terms and conditions of the student loan or the applicant’s credit history. For example, a student loan cannot be granted to a student on academic leave, nor if the person has already exhausted the maximum permitted loan period for that level of education. Furthermore, not all levels of study qualify for a student loan, and previous payment defaults or outstanding debts may act as a barrier.
‘Although a student loan is state-guaranteed and offers more favourable terms than a standard consumer loan, it is nonetheless a long-term financial commitment. It is therefore worth considering, before taking out the maximum amount, how much money you actually need for your studies and using it for that specific purpose, as this loan must be repaid once your studies are complete’ emphasised Vatsel.
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