Understanding Student Loans – Who, Why & When

Education is essential for everyone, but over time it is becoming expensive also. The financial barriers stop numbers of students to pursue higher study just because of cost factors. The UK Govt. conducts names of programs to support the students continue their studies up to any level yet very high numbers of students turn to private lending agencies for borrowing for one or other reasons. Student loans are the sums of funds borrowed for education; these funds are to be paid back over time with interest.

The grants and scholarships are also structured to facilitate for higher studies; these are interest rate free never to be paid back financial supports; therefore, before borrowing from private lending agencies, explore the opportunities to get Govt. supported or intuitional supported financial aid. Loans should be your last riding option if you don’t get any way to go ahead with study plans. There are two ways to obtain required financial help – Govt. institutions and direct lenders choose the best at the right time with logic.

Student loans by Govt. institutions:

Student loans by Govt. institutions

You may borrow money to pay the college or university tuition fees as well as to meet out the living costs. If you have low income or you are disabled, or you have children, you might get extra funds on top of the regular contingencies. The repayment starts once you start earning over a certain amount per month. The amount of monthly instalment depends on your winning, not on the assets you owe. You will have to pay interest on the borrowed money from the day of credit. The repayment terms and conditions may change anytime. If you are an estranged student from the parents, there are special provisions. There is a different process for the students from Scotland, Wales and Northern Ireland. The full-time student loan for 2018 to 2019 academic year at Govt. institution is up to £9,250 while the financial help for full-time students is up to £6,165 for 2018 to 2019 academic year at private university and college.

Maintenance loan to meet out living costs for 2018 to 2019 academic year for the students living at home is up to £7,324. Maintenance loan for the students living outside London away from home is up
to £8,700. Maintenance loan for the students living in London but away from home for the 2018 – 2019 academic year is £11,354. If you are 60 years of age on the first day of a first academic year, of course, you are entitled to get £3,680 financial help. The online student finance calculator at the gov.uk website is useful to estimate possible maintenance cost. For more information, you should visit the Govt.’s website for the latest introductions as the rules keep on changing.

Eligibility for Student Loans by Govt. Institutions:

Eligibility for Student Loans

Whether you qualify or not for a student loan primarily depends on:

  • If you have completed any higher education before or not
  • Type and rank of college/university
  • Kind of course & duration
  • Age at the time of course joining
  • Nationality and residency status

Institutions offering degree level courses are called recognised or listed bodies. A recognised body is the higher learning institution allowed to award degrees. A registered body can’t assign the degrees itself; the degree is granted by the recognised authority.

How Much, How And When You Pay:

The repayment amount depends on the type of education funding plan you opt. Each project has a threshold earning limit for weekly / monthly income. For Plan 1 and 2, a student pays 9% of over the threshold earning limit. For a postgraduate loan, a student pays 6% of over the threshold earning limit. In case of having financial help under plan 1 or 2 in addition to the postgraduate loan, the student will repay 15% of over the threshold earning limit.

The scheduled repayments are deducted automatically from the salary like the deductions for taxes and insurance. The payslip shows the deducted amount. It is your responsibility to inform the employer about education loan you hold. You don’t repay anything until your income is before the threshold slab. Interest starts over the borrowed money from the first payment. If you are self-employed, HM Revenue and Customs (HMRC) works out how much money to be deducted from your income at the time you pay tax. The repayment rules are the same if you work outside of the UK for a UK employer, but the repayment rules change if you join a foreign employer.

Student Loans by Private Lending Agencies:

Private Lending Agencies

The numbers of FCA regulated direct lenders with online presence offer discounted rate student loans for any level study. The reputed lending agencies strive to make quality education accessible for all. The interest rate and other terms and conditions are fixed by course type and the earning potential after completion not by what you possess now. The major part of borrowed money is to be repaid after you start earning, but the interest rate starts from the day you take a loan. The instant decision student loans are of great help for the students who need additional financial support despite getting the Govt. sponsored loans. The application process is straightforward; and, it doesn’t need a guarantor or mortgage essentially; however, secured student loans are cheaper. The simple method, fewer formalities, flexible repayment terms, easy eligibility criteria etc. make the direct lenders a preferred choice of numbers of students pursuing a different professional course not covered under the Govt. sponsored financial help. The leading direct lending agencies provide accurate and comprehensive advice also on how to pay the debt earlier as well as to manage other obligations in a cost-saving manner.

Concluding Note:

Getting student loan from the UK Govt. institution or private lenders is not a typical task because of easy eligibility criteria. Because of being affordable, student loans empower the students to focus on the career objective better rather than managing the living expenses. The student loans from direct lenders are of great help to meet out the costs not covered by the low rated Govt.’s financial support. Better, you plan strategically with a balanced mix of both with a priority of getting Govt. funds.

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