Student And Graduate Loans

Student And Graduate Loans



Student and Graduate Loans
Student and graduate loans are becoming more popular as​ student debt continues to​ rise and students seek alternative ways of​ dealing with it .​
The good news is​ that student or​ graduate loans are generally available without the​ need to​ show steady income or​ offer security .​
This is​ extremely helpful,​ as​ most students will not have either of​ these .​
Student and graduate loans also come at​ relatively good interest rates,​ particularly having regard to​ the​ fact that they are completely unsecured .​
The thing to​ be wary of​ is​ that such loans may lock the​ student into a​ long-term relationship with the​ lender that may not be the​ most advantageous one .​
Student Debt
Students leaving college today average about £14,​000 in​ debt .​
More than two thirds of​ all students must borrow and the​ vast majority of​ this debt takes comes from special loans provided by the​ Student Loan Company .​
Once the​ student begins working,​ the​ loans will be repaid,​ but the​ interest rates are capped at​ the​ highly attractive rate of​ 1% above base rate .​
This is​ very low compared to​ most sources of​ credit available.
The rules for repayment are simple .​
Beginning in​ the​ April after graduation,​ 9% of​ all earnings above £15,​000 are automatically taken to​ repay the​ Student Loan Company .​
The loans are therefore very safe,​ as​ they are only due once you​ join the​ workforce and begin to​ earn a​ steady salary .​
Graduate Loans
Graduate loans on​ the​ other hand,​ are far more expensive than student loans .​
These loans are generally offered on​ graduation,​ when student loans are no longer available,​ to​ cover the​ costs of​ transition from student life to​ working life .​
This may include finding a​ new place to​ live,​ buying work clothes etc .​
Graduate loans will also be used to​ pay off student overdrafts,​ which are offered to​ all students as​ standard features of​ their bank accounts .​
The point to​ remember is​ that while graduate loans are relatively cheap when compared to​ personal loans,​ they are far more expensive than student loans .​
Employment
If you​ have a​ job lined up,​ you​ may be able to​ borrow money from your new employer at​ a​ far better rate .​
This is​ one alternative to​ graduate loans .​
Another alternative is​ career development loans,​ which are available to​ those studying for certain professional qualifications such as​ medicine or​ law .​
Many high street lenders offer these .​
It can be very easy to​ lose control of​ debt while studying .​
The credit is​ very easy to​ obtain and repayments so far into the​ future that they don’t seem real .​
However,​ high student debt can seriously hamper attempts to​ buy a​ home once you​ enter the​ workforce,​ or​ save for a​ pension .​
The trends show that while student debt continues to​ increase,​ graduates are faring better,​ relying less on​ borrowing and more on​ salaries,​ to​ meet their needs.




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