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Student Loan Guide
Student loans are organised by the government through the Student Loan Company SLC. The principle for Student Loans is that they should affectivity be free of charge as the rate is set in line with inflation.
You only start to pay the loan back once you have finished or left University and are earning over £15,000 a year. If you are not earning over £15,000 a year you won’t have to make any loan repayments and if you started your course after September 2006, after 25 years all of the outstanding debt is wiped clean.
If you are earning over £15,000 a year then the amount that you pay back is 9% of whatever you earn over £15,000. So if you earn £20,000 a year you will pay back 9% each year of the £5,000 that you earn over £15,000 which is £450.
Rates of interest are set in line with inflation and in particular, rates are set each September based on the Retail Price Index RPI from the previous March. There are however are a couple of caveats relating to this. The most important being that the Government can chose whether to charge interest or charge none at all. The reason for this is so that the taxpayer doesn’t have to fund a reduction in the student loan debt if the RPI index is negative. This March’s RPI figure is -0.4% so if this rate was applied to all loans borrowers would see the actual balance reduce, and the taxpayer would fund this. Currently rates are 1.5% for post 1998 or 3.8% for pre 1998 loans so the Government has decided that starting in September the rates will drop to 0% and -0.4% respectively.
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Dan Gale, Moneyextra.com May 2009
Moneyextra.com recommends you take independent financial advice before acting on any article
Back2009-05-21 13:18:11 © Moneyextra.com
Loans - Top Picks
| Unsecured Loans |
| Barclays Bank - Existing Customer Barclayloan Plus Funded | ||||
Barclays Bank
|
Monthly Payment |
Representative APR |
Rate Type |
Total Payable |
| £386.94 | 6.2% | Fixed | £23,216.38 | |
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Representative example: based on a loan of £20000 Representative APR 6.2% Fixed. Total amount repayable £23,216.38 at £386.94 per month for 60 months. |
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| Barclays Bank - Existing Customer Barclayloan Plus | ||||
|
Monthly Payment |
Representative APR |
Rate Type |
Total Payable |
| £410.87 | 8.9% | Fixed | £24,652.44 | |
|
Representative example: based on a loan of £20000 Representative APR 8.9% Fixed. Total amount repayable £24,652.44 at £410.87 per month for 60 months. Find a cheaper offer and Barclays Will Pay the Difference |
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| HSBC - Existing Customer Personal Loan | ||||
|
Monthly Payment |
Representative APR |
Rate Type |
Total Payable |
| £419.82 | 9.9% | Fixed | £25,188.92 | |
|
Representative example: based on a loan of £20000 Representative APR 9.9% Fixed. Total amount repayable £25,188.92 at £419.82 per month for 60 months. Find a cheaper offer and Barclays Will Pay the Difference |
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| Nationwide Building Society - Personal Loan | ||||
|
Monthly Payment |
Representative APR |
Rate Type |
Total Payable |
| £419.82 | 9.9% | Fixed | £25,188.92 | |
|
Representative example: based on a loan of £20000 Representative APR 9.9% Fixed. Total amount repayable £25,188.92 at £419.82 per month for 60 months. Advertised rate for main FlexAccount customers only, other options available. |
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| Secured Loans |
| Norton Financial Services - Secured Loan | ||||
|
Norton Financial Services
|
Monthly Payment |
Representative APR |
Rate Type |
Total Payable |
| £419.82 | 9.9% | Variable | £25,188.92 | |
|
Representative example: based on a loan of £20000 Representative APR 9.9% Variable. Total amount repayable £25,188.92 at £419.82 per month for 60 months. |
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| Willows Finance - Good Credit | ||||
|
Monthly Payment |
Representative APR |
Rate Type |
Total Payable |
| £419.82 | 9.9% | Variable | £25,188.92 | |
|
Representative example: based on a loan of £20000 Representative APR 9.9% Variable. Total amount repayable £25,188.92 at £419.82 per month for 60 months. Low Rate, Cheap, Secured Homeowner Loan |
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| Nemo Personal Finance - Secured Loan | ||||
|
Monthly Payment |
Representative APR |
Rate Type |
Total Payable |
| £433.30 | 11.4% | Variable | £25,997.90 | |
|
Representative example: based on a loan of £20000 Representative APR 11.4% Variable. Total amount repayable £25,997.90 at £433.30 per month for 60 months. Low Rate, Cheap, Secured Homeowner Loan |
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| Nemo Personal Finance - Secured Homeowner Loan | ||||
|
|
Monthly Payment |
Representative APR |
Rate Type |
Total Payable |
| £451.40 | 13.4% | Variable | £27,083.81 | |
|
Representative example: based on a loan of £20000 Representative APR 13.4% Variable. Total amount repayable £27,083.81 at £451.40 per month for 60 months. UK Secured Homeowner Loan |
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