Interest assistance
Interest assistance means that Kela pays all of the interest due on your government-guaranteed student loan. There is no obligation to repay Kela for the interest.
Eligibility
You can get interest assistance if
- your income is less than a specified limit and
- your bank no longer adds the interest due to your loan principal but has begun to charge you interest.
As long as you receive financial aid payments, the bank will not charge you interest. Instead, the interest is capitalised, i.e., added to the principal amount of the loan. When you stop receiving financial aid, the bank will capitalise the interest for another term. After that it will begin to charge you interest.
Example of capitalisation of interest and granting of interest assistance
A student last received financial aid for the spring term 2023. The bank capitalised the interest due on her student loan in June 2023 and again in December 2023. The student is first eligible for interest assistance for the interest payments of the first half (January-June) of the year 2024.
If you are performing conscript service, Kela pays the interest on your student loan under the conscript's allowance scheme.
You cannot get interest assistance for loans which Kela has paid back to the lender bank under its loan guarantee liability and which Kela is collecting from you.
Income limits
In order to qualify for interest assistance, your income must remain below a specific limit. The income limit is higher if you are the guardian of your underage children or if your married spouse’s or cohabiting partner’s underage children are living with you. Your cohabiting partner can be of the same sex as you.
- no children: €1,589 per month
- one child: €1,835 per month
- two children: €1,902 per month
- three or more children: €2,015 per month
The income limits are raised every other year in line with the increase in wages and prices.
Interest assistance is affected by your income during a period of 4 months:
- The interest assistance for interest payments due during the first half of the year is affected by your income from 1 February to 31 May.
- The interest assistance for interest payments due during the latter half of the year is affected by your income from 1 August to 30 November.
Any income you receive is taken into account as income for the period in which it was paid. However, capital gains are generally considered income received on the date of sale.
If you have had varying amounts of monthly income over that period, the amounts are averaged and the average amount may not exceed the income limit. Kela takes into account gross income, i.e., income before taxes and deductions.
Interest assistance is affected by taxable income from earnings and capital. Read more about taxable income.
Tax-exempt incomes and benefits do not affect the interest assistance. Tax-exempt benefits include e.g., housing allowance, child benefit and social assistance.
Rules concerning the effect of income on interest assistance are the same as for financial aid for students.
Example of interest assistance and related income limits
A student applies for interest assistance for interest payments due in the latter half of the year (July-December). Eligibility for interest assistance is affected by her income in August, September, October and November, which amount to €800, €2,000, €1,500 and €1,000, respectively. Averaged over four months, her income comes to €1,325 per month. This is less than the income limit of €1,589 per month. The student is granted interest assistance.