Debt

Some banks offer students to overdraw their account, i.e. to withdraw more money than is in the account. These loans are very expensive, because depending on the bank, 11-18 percent interest is added to the minus on the account every 3 months. If the credit limit is exceeded as a result, the account can be blocked/cancelled and the bank reclaims the credit. Overdrafts are one of the most expensive forms of credit and a lucrative business for banks.

Our recommendation: check the terms of the loans very carefully. If you need extra money, get advice, for example from our social counseling service.

Long contract periods are often found in the areas of mobile communications, telephone, TV and Internet, but also with electricity providers or fitness studios. Providers advertise low rates, flat rates and free gifts if you sign a contract for a fixed period. The contract cannot usually be terminated during this period - even if you no longer want or need the service. If you have an insecure and low income, it is therefore not recommended to conclude contracts with a fixed term.

Our recommendation: Please always read contracts/ general terms and conditions (including the fine print) carefully before signing them. Have the terms and periods of notice explained to you. Take a friend with you or seek independent advice (e.g., consumer advice center) before signing a contract. Please do not sign a contract that you do not fully understand.

The option of buying expensive items such as notebooks, electrical goods, televisions, flights and much more on installments is tempting. But this usually incurs interest, which ultimately makes the product more expensive than it actually is. And even with interest-free offers, the installment must be paid every month.

Our recommendation: Think carefully about whether you really need this purchase and whether you are able to pay the monthly installments. Do not calculate too optimistically. There are always short-term unplanned expenses. You should have a buffer for this.

Health insurance is mandatory in Germany because medical treatment is very expensive. Proof of health insurance is required of students when they enroll and for their residence permit.

Students are usually compulsorily insured in a statutory health insurance fund. If you do not pay the monthly contributions, the insurance relationship will be suspended at some point. In this case, the health insurance does not automatically cover all costs for necessary medical treatment. Special operating procedures must be followed, and the insurance card may not be used. The health insurance companies report "dormant insurance" to the universities and re-registration at the university is then not possible. There is a threat of exmatriculation.

In the preparatory phase of studies (preparatory course/language course), you cannot yet register with a statutory health insurance company, but must take out private insurance. For this purpose, there are special health insurances for foreign students in Germany, some of which are very inexpensive, but provide fewer benefits than the statutory health insurances. Many doctors confuse them with the "normal" private health insurances. You will have to pay for more expensive medications, more examinations, etc. yourself if you have not clarified the coverage of costs with the insurance company prior to treatment. Recommendation: Please insist that the doctor clarifies the treatment costs with your insurance company or ask for a cost estimate.
Private health insurance for foreign students usually has a waiting period of 3 months. During this time, no benefits are normally covered. Treatment for illnesses that you already had before taking out the insurance ("pre-existing illness") will also not be paid.

When you start your studies, you have the option to join the statutory health insurance or to be exempted from the statutory insurance obligation. The exemption is binding for the rest of the study period! This also applies if your insurance company cancels you or if the maximum insurance period has been reached. You will then have to enroll in a normal and very expensive private health insurance.

We recommend: register with a statutory health insurance company.