If you’re intending on attending college next year, then- you’ll likely already be thinking about obtaining a student loan to financially support your education. While these loans are certainly a great thing for kids- that may help them to afford and attend university, it does come with a certain amount of chaos around- eligibility, how to apply for the credit, and how it operates when it comes to repayment.
In light of the recent revisions to the repayment threshold for Student Loans in the UK, we’ve mapped a guide to help you understand more about the credit and what to consider when applying for your loan.
Student Loan
A student loan is a type of unsecured loan designed to help students pay for university and maintenance cost- such as tuition, books, and general living expenses. It may vary from other types of loans, as the interest rate charged is considerably lower and the repayment schedule also delayed.
Student loans in the United Kingdom are primarily granted by the state-owned Student Loans Company.
Student Loan Types
There are two types of student loan in the UK- tuition fee loans and maintenance loans.
Tuition fees loan covers your college tuition fees and automatically includes the course you choose to register in. Student Finance England pays the tuition fees loan straight to the university you enrol in. The borrower doesn't get the funds in his bank account at any point.
Maintenance loan will cover your cost of living at the university, which covers- your rent in halls or a house, food, or travel cost. The amount you can borrow for your maintenance loan will depend on your parents' consolidated income. Hence, some students will receive a higher maintenance loan amount in comparison to others.
Who Can Take Out Student Loans?
Loans for students are for every individual- including full-time and part-time undergraduates as well as postgraduates. Many students apply for this credit to pay for their tuition fees at college. However, whether you are eligible or not depend upon many determinants- which include your course program and university, and age and nationality. They will also weigh whether you’ve studied a higher education course before you are applying for a student loan.
However, only full-time and part-time students are allowed to apply for a maintenance loan, which covers the living cost at the university, such as- food, travel, and accommodation. EU students can also request for a maintenance loan, with a condition- that they must have lived in the UK for three or more years.
Students can also consider options such as Bad credit loans no Guarantor as these are easy to avail. Some lenders offer soft quotes for these credit products so that it will not impact the credit scores of the borrowers.
How Much You Can Borrow?
The amount you can borrow for your tuition fee loan will be the amount required to cover the course fees for your university. This will directly get funded to the university by Student Finance England. However, it works slightly different for the maintenance loan. The amount a borrower can borrow will depend on your parents’ or guardians’ family income.
Hi, this is Jemma Madison, Financial Writer at Loan Princess which is an FCA authorised loan broker in the UK. If you need any help regarding unsecured loans, please visit the website.