For most UK students in order to make it through university they’ll need to apply for student loans, the loans provided by the Student Loans Company are served after determining course fees, the level of support you’ll receive from your parents and take in to consideration that you’ll need to pay for accommodation and books.
Normally the amount given will not cover every expense that higher education incurs but will help cover most administrative costs, leaving you to get a small part time job possibly working at a bar (a popular student workplace/recreational location) and that money can be used to fuel the endless nights out but also for those all-important books!
With average university loans per year being around £3,000-4,000 and a course normally lasting three to four years by the end of your four years you could have a student debt of £16,000 to repay. As daunting as this seems student loans are fortunately different from conventional loans and have a lower interest rate and more flexible repayment strategies.
One of these strategies means you will not have to repay your loan until you are in full time employment earning above £15,000 per year. It isn’t uncommon for former students to still have student loans going well into their thirties but that doesn’t mean you can’t get rid of them quicker, if you want to be debt-free as soon as possible then there are a few tips that some insurance companies have offered to students who want to get out of the red and start putting that university degree to good use!
The first thing to check is if you can repay the loan earlier than the set out dates that they give you upon completing your course, this normally comes into effect six months after graduating by which time you should be in a job and earning the big time salaries your qualification dictates. You should check that paying off the loan early is OK because sometimes you will incur an extra charge for paying off too much too soon. It sounds silly but as with all loans banks count on you being in debt to them for a long time so they earn money through interest.
It’s not a bad thing to pay off loans early; after all it should help keep any possible negative marks on your credit report. Speaking of which, you should keep an eye on your credit status after university, debts can often have a nasty effect on getting credit or other big purchases such as houses and mortgages. You can apply to see the information the three credit companies (Experian, Equifax and TransUnion) and is worthwhile keeping an eye on in your years after university.
Keeping an eye on your repayments with regards to other debts is important too, in the grand scheme of things if you have large credit card debts as well as student loans you are better off prioritising your repayments and dealing with the credit card debts first, again the student loan will have a lower interest rate and will not result in you losing more money which would happen if you left credit card debts unchecked.
In general, student loans are not to be taken lightly, but they understand students who have recently left higher education and entered the working world. The six month grace period is long enough for graduates to find some form of income and start repaying their loans. When repaying loans take care to make sure the ones with the most interest are dealt with first and don’t be afraid to seek out advice and help from financial advisors and other sources.
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