I'm interested in applying for the Postgraduate Student Loan of £10000 but I have queries about the interest rate on the loan. Currently the interest rate is 4.6%, so I was wondering how much interest rate I would have to pay per month or per year in addition to repaying the loan.
Assuming I want to repay the loan on a standard manner in 30 years. Therefore, £10000 divided by 30 years is £333 per year (10000/30=333) and £27.75 per month. Is the 4.6% interest rate the amount corresponding to the £10000? If yes, 4.6% interest on £10000 is £460. Are these £460 the total amount of interest I must pay? Or must I pay £460 each year in addition to repaying my loan? Distinguishing between whether I must pay £460 interest in 30 years or whether I must pay £460 interest every year is crucial to my decision on taking this loan, because £460 interest in a total of 30 years is only £15.31 a year and £1.27 a month, whilst £460 every year for 30 years is £38.33 a month, which would skyrocket the monthly amount I would have to pay to £66.08 a month, £792 per year, and £23788 in 30 years! The lender's gain would then be £13788! So which one of the two is it?
Finally, the loan gathers interest rate after the first installment of payment made to me. Does that mean that my loan will accumulate interest on it even before I have started to gain an income over £21000?
Interest rate on Postgraduate Student Loan
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