I did not get a student loan when I went to college as the grant system was in place. Did I appreciate it – no! I didn’t know any different – then, it was just what happened. You were given a grant and went to college. Don’t be misled though it was never enough to live on and we all had part time jobs in term time and scrambled for the best summer jobs. I still came out with a hefty overdraft even then.
Now I’m trying to save for when my daughter goes to college, hopefully in few years. I dread the thought of her having a debt hanging over her even before she’s really started her working life. She’ll get part time work, summer jobs, I’ll pay whatever I can and throw my savings at the debt.
Student loans are a fact of life and cannot be ignored. In that respect negotiate the best interest and repayment plan you can. Throw money at your living expenses debts while you can by having part time jobs – great experience for your later working life. Then take a deep breath and when you start full time work get out of debt as fast as you can before other financial constraints take over.
When people are short of money, often their first thought is to ask their friends for a quick cash loan. Applying for a bank loan can sometimes be a stressful and complicated process, but a good friend is always there for some monetary comfort.
The question is, is it really worth losing a good friend because of money? Sure, they probably won’t charge any interest on the money, but what if you’re unable to pay them back? Then you’ve lost their trust, their friendship and their cash. Debt is also a huge cause of stress, no matter who you owe, and debt can affect your health.
On the other hand, you can’t really have the same kind of friendship with a bank. So does that mean there’s less to lose? Not really. Whilst you may be able to get a fantastic amount of money up front, most of the time you’ll end up paying back much more in the long run. If you do get into trouble with paying back your loan, be sure to get debt advice.
It all depends on how much you want to borrow, and what kind of timescale you’ll be able to pay it back over. If you’re confident that you’ll be able to pay the money back in its entirety, it might be better asking a close friend, or arranging a short term loan, as long as the amount isn’t too high. Then again, if you need a large amount of money for a legitimate purpose then a bank loan could be the ideal choice.
Those IVA adverts on TV stating that people can write off 75% of debt are a best case scenario. It is also a highly improbable scenario but it can be better than bankruptcy.
If you choose IVA as a debt solution, your creditors will seek a minimum of 25p for every £1 of debt as an absolute minimum which is where this figure in the adverts originates. It will be necessary to accept that there is a strong possibility that you will have to pay a lot more than this, particularly if you have a high earning professional vocation.
The insolvency practitioner also comes with a hefty price tag and can add a further £7000 to the amount you need to raise. If you also own a property you will be expected remortgage at the end of year 4. This could actually mean that you end up paying your debts in full.
If you maintain your payments for 60 months you will be discharged from your remaining debts. There are however some IVA benefits. It is not an easy option, but does give people with crippling debt problems the chance to keep their job, home and self respect.
A student loan is a loan from your Local Education Authority (LEA) to help you through the growing pains of independent living whilst in Higher Education. Most current and prospective students will take the student loan (AKA maintenance grant) to help them pay rent and buy food. But not everyone might need one.
A student loan is a voluntary loan which is applied for each year you are at University. This means if you don’t want the burden of an ever interest-accumulating debt hanging over your head, you can not apply for one, providing you can fund yourself in other ways. Some students study close enough to home that they don’t need to rent a house or buy food. Others who are on a part-time course may be able to have paid work to see them through. Or you might just have the means to take care of yourself already.
For many, student loans are one of the major causes of debt. For those that don’t need to take out the loan, it might be worthwhile to take out the basic £3000 amount and invest the money in a mini-cash ISA or premium bonds. The student loan does gain interest, but only according to inflation. If your investment is better than this, then it could be worthwhile doing some research.
Student loans should be used by only those who require this financial assistance.
The financial help a new full-time student can get depends on the course, where they live while they are studying, and their individual circumstances.
Committing yourself to debt is an important decision to make, and students should not see this as free money when they go to university, or an excuse not to get a part-time job during their studies. Many individuals have no choice but to opt for the student loan route, due to lack of help from parents, lack of savings or lack of employment during their studies. In this case, taking out a student loan may be the best option for these individuals. However, if you are in a position to plod on without taking out this loan, or getting involved with apparently cheap credit cards, then it is advised that you do so.
It is only when you reach a certain level of earnings that you have to start paying back your student loan, but this should be a warning to all students out there. As graduates struggle to find well paid jobs and get a foot on the housing ladder, the last thing you really need is to be hit with debt repayments to the student loans company when you start to earn.
The best advice is to be sensible. If parents can help you, then take it. In the long term it is worthwhile not to be burdened with the repayments. However if you do need this financial assistance then go for it, but ensure that you are prepared for the future implications on your earnings once you reach the threshold.