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Interst rates for student loans
Former Member
Posts: 1,876,323 The Mix Honorary Guru
How much interest do you have to pay when you are paying back a student loan?
Post edited by JustV on
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If you are thinking of taking it out, then IMO probably best only to take it out if you need it, as opposed to investing it, saving it, etc. as you will have to repay it at a higher rate of interest than inflation later on. But only advice. Do what is best for you
Excellent advice. Except that it is completely and utterly wrong.
Loans from the Student Loans Company are tied at the rate of inflation based on the Retail Prices Index. It is not an interest-free loan because it is not charged at 0%, but the amount you pay back is the amount you borrowed, in real terms at least.
Current rate is a smudge under 3% I think.
Ignore any advice that says anything different- it is incredibly wrong.
As soona s you take out your first loan pound you are charged interest, and the interest charged is added to the total you owe. This is called compound interest, where you pay interest on interest.
The amount you pay in interest depends on how long it takes you to pay back the amount you owe. As it is compound interest the quicker you pay it off the less you are charged.
Ok, I take back that advice then lol
im in a 4yr course, im screwed then
It's free money, really. You pay back the amount you owe, end of story.
Better than getting a job, non?
After a year on the dole and defering payment,
they sold my load to another company who
forced me to start paying it back. Only £20
a month but... :-(
The Student Loans Company don't do that.
If you are earning elss that £10,000pa then you don't make payments. They will take payments until you are 65. They cannot charge more than the RPI rate.
So I think you're getting confused.
You have to tell them if you will be resident or working for a period in another country, but I'm not sure what else.
http://www.slc.co.uk
Have they plugged the loophole yet where you can decalre yourself bankrupt and get it all written off?
The Student Loans Companies in the US dont let you do that, they just 're-structure' your loan repayments for you.
I have no intention of.
I just find it amusing.
But then US student loans can easily be above $100,000