Is a lot of interest incurred from student loans?
Discussion and questions about student financial support arrangements - from government loans and grants to university bursaries. Please use the main Money & Finance forum for more general financial topics.
This thread is sponsored by:
| Announcements | Posted on | |
|---|---|---|
| Important: please read these guidelines before posting about exams on The Student Room | 28-04-2013 | |
-
- Reputation:
- Thread Starter
- Banned
- Posts: 37
- Warning points: 1000
Is a lot of interest incurred from student loans?I have recently discovered that you get charged interest on student loans? is the interest added monthly, yearly? what is the average interest rate?
If I graduated from Uni with £15,000 of debt, say 20 years later I don't pay back a single penny, what do you think the £15000 may rise to? -
- Reputation:
- Section Leader
- Supersonic Moderator
- Location: Manchester
Re: Is a lot of interest incurred from student loans?Interest accrues on student loans daily, but IIRC is added to your loan balance monthly. See here for details of interest rates: http://www.studentloanrepayment.co.u..._schema=PORTAL (for those starting courses before this year).(Original post by Eloise 1987)
I have recently discovered that you get charged interest on student loans? is the interest added monthly, yearly? what is the average interest rate?
If I graduated from Uni with £15,000 of debt, say 20 years later I don't pay back a single penny, what do you think the £15000 may rise to? -
- Reputation:
- Thread Starter
- Banned
- Posts: 37
- Warning points: 1000
Re: Is a lot of interest incurred from student loans?So on a £15000 loan, what interest should I expect?(Original post by Illusionary)
Interest accrues on student loans daily, but IIRC is added to your loan balance monthly. See here for details of interest rates: http://www.studentloanrepayment.co.u..._schema=PORTAL (for those starting courses before this year). -
- Reputation:
- Section Leader
- Supersonic Moderator
- Location: Manchester
Re: Is a lot of interest incurred from student loans?Well, at 1.5% that starts off at £225 for a year, but interest is cumulative and I can't predict future interest rate changes.(Original post by Eloise 1987)
So on a £15000 loan, what interest should I expect? -
- Reputation:
- TSR Demigod
- Posts: 7,443
Re: Is a lot of interest incurred from student loans?It's set out more clearly on direct.gov.uk:
- while you're studying - rate of inflation plus 3 per cent
- £21,000 or less - rate of inflation
- £21,000 - 41,000 - varies between the rate of inflation and the rate of
inflation plus 3 per cent depending on your income - £41,000 or more - rate of inflation plus 3 per cent
http://www.direct.gov.uk/en/Educatio...ance/DG_171539 -
- Reputation:
- Section Leader
- Supersonic Moderator
- Location: Manchester
Re: Is a lot of interest incurred from student loans?(Original post by DarkWhite)
It's set out more clearly on direct.gov.uk:
- while you're studying - rate of inflation plus 3 per cent
- £21,000 or less - rate of inflation
- £21,000 - 41,000 - varies between the rate of inflation and the rate of
inflation plus 3 per cent depending on your income - £41,000 or more - rate of inflation plus 3 per cent
http://www.direct.gov.uk/en/Educatio...ance/DG_171539
Ah, yes - that's for new course from this year, I think? My explanation is for courses starting before this year.
-
- Reputation:
- TSR Demigod
- Posts: 7,443
Re: Is a lot of interest incurred from student loans?Previously it was some dodgy calculation which was something like Bank of England base rate or rate of inflation + 2%, whichever is higher at the end of the month, or tax year, or something; it was confusing!(Original post by Illusionary)
Ah, yes - that's for new course from this year, I think? My explanation is for courses starting before this year.
-
- Reputation:
- Exalted and Worshipped Member
- Location: England
- Posts: 1,022
Re: Is a lot of interest incurred from student loans?I'm pretty sure that this was also put into place for all students with loans, regardless of when they started university. Can anyone prove otherwise?(Original post by Illusionary)
Ah, yes - that's for new course from this year, I think? My explanation is for courses starting before this year.
The link further up on the thread is just a history of interest rates. -
- Reputation:
- Section Leader
- Supersonic Moderator
- Location: Manchester
Re: Is a lot of interest incurred from student loans?Yep, see here:(Original post by S23a)
I'm pretty sure that this was also put into place for all students with loans, regardless of when they started university. Can anyone prove otherwise?
The link further up on the thread is just a history of interest rates.
Plan 1 (for existing students): http://www.studentloanrepayment.co.u..._schema=PORTAL
Plan 2 (for new students): http://www.studentloanrepayment.co.u..._schema=PORTAL
They can't change the T&Cs re interest for existing loans.
