Funding your education has never been easier
Tertiary education in the UK is of top-notch quality, but university studies are expensive and not everyone can afford the upfront payment.
Although some students do prefer paying off their fees entirely by themselves, as they are scared of taking out student loans and being in debt for forthcoming years. Another concern is that they need to find good employment, as soon as they graduate, in order to pay off the student loan.
Important facts about student loans in the UK
In the UK, student loans are cheap and affordable, in fact, it has been deemed as the best way to fund your tertiary education. The interest rates and APR applicable to student loans are lower than other loans.
Most students are advised to open a savings account, so all money saved from repayments can then bring you a greater return. Thus, taking out a student loan is deemed an efficient way of funding your studies and saving money simultaneously.
If you come from a low-income household and cannot afford a student loan at a given time, you are eligible for a waiver. In this case, the money you would have paid for tuition is reduced and made affordable.
Some students may even qualify for a scholarship or a bursary. It is advised that a bursary is more advantageous, as you receive the money at the moment’s notice. Money can be saved to repay the loan at a later stage.
Eligibility of student loan and application process
In the UK, the process of attaining a student loan is fairly easy. SLC (Student Loans Company) is a government-run organisation that handles all matters of student loans and this is where the application is made.
However, only residents of the UK can apply for the loan and you need to be able to provide your ID document, as well as proof of address in order for your application to be considered.
Another important requirement is that you must fill out all requirements for an accredited or registered course, degree or certificate at a UK based tertiary education provider.
Shop around for your student loan
It's best to do research on various programs and institutions. You must also search for any available scholarships before jumping into the decision to take out a student loan. You can also look for grants offered by the government or other organizations that fund your studies without the need for repayments.
Once you ensure that you meet the eligibility criteria and are a full-time student, you can then apply for a student loan if no other options are available. The student loan pays for your cost of tuition; in the UK you can get a loan up to 9,000 pounds per year.
You can also apply for a maintenance loan. This loan covers all your expenses, including housing costs, bills, purchases of everything related to your study (books, instruments or any equipment you might need). In the UK, you can get a maintenance loan up to 8,000 pounds a year, just a little below average tuition loan.
The real struggle begins after loan approval
As soon as your loan is approved, and you begin your studies, you are in debt. Now, you must repay the money that you owe to the lender. In majority cases, you can repay the loan after your studies end and you get a job.
However, it is advised to find a part-time job during your studies and pay a little bit on a regular basis. By the time the next three or four years have passed, you have already paid a quarter and your burden is a lot lesser.
You can also seek help from your parents or close relatives to help you pay back the loan. Their contribution, no matter how small it is, matters a lot. You would need to control your expenses for the loan repayment period and ensure you keep a strict budget and not let yourself overspend money.
This is important because if you are unable to pay back your student loan in time, you would always try to take another loan and get caught in an endless cycle of debts.
You can avoid taking out a maintenance loan entirely by living at home. This will save you from taking the extra debt upon yourself and making repayments that you might not be able to afford.
It's also recommended to open a student account upon loan approval, this would allow you to save better and manage your money properly. The organisation is vital for any form of budgeting and budgeting is vital for repayment of student loans.
The student loan is not on your credit report
Your repayments or non-payments do not impact your credit history. In fact, in some cases, the lenders are unaware of your repayment status.
Unlike another form of lending, with student loans, you are not harassed by creditors and you do not have to worry about the consequences of missing out a payment or two. The loan is not a part of your credit report and hence it does not impact it in a bad way.