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Monthly vs termly loan payments....which would be better?

"Feast or Famine:student finance must be reformed" talks about the results of a recent Unite Students Insight Report:

- Three quarters of students think they are good with money overall but...
- 40% of those are either stressed or very stressed about managing money
- 18% have gone without food or bought less food to save money :frown:

- The areas that are often impacted by tight budgets are things like socialising and hobbies

This article suggests that there should be reforms in Student Finance because...

If the current student finance system is causing stress and is not meeting the needs of its users then it must be reviewed. Few products are allowed to keep on being sold in the same way when they cause users distress

It concludes...

The current system only encourages a ‘feast or famine’ mentality. Introducing monthly loan payments can only save everyone – students, universities and taxpayers – money, time and stress.

Do you think student loans should be paid on a monthly or a termly basis? And why?

Reply 1

Dougieowner

Personally I'd find it easier to manage if it was monthly. In my first year student finance wasn't really a problem because I was living in halls and the rent was always due after finance had come through. I liked the way they worked it (student finance came at the beginning of the term, rent was paid at the end of term). But now in private accommodation, I find that student finance comes at the wrong time. I had to start paying quarterly rent in July for my house, but my student finance for second year doesn't start coming through until October... The amount I get overall is sufficient but the timings are all wrong. :s-smilie:

Reply 2

Tiger Rag

There are advantages to both. I guess monthly does make it easier and probably will mean that some people won't go mad and think "I've got all this money" and then it gets to the end of term and they're living in their overdraft.

If you're paying rent monthly, it makes it so much easier to be paid monthly. But halls want it termly.

Reply 3

Arianax

I just think you need to budget well, if you have good budgeting skills then it's snot too bad.

I'd go with monthly and make a document on Microsoft Excel, with my budget for a month on certain things for example food. I will try not to go over that limit and have a goal for myself.

Also I try to do my food shopping online aswell because it reduces temptation of picking whatever you want in a supermarket etc, I usually get this delivered for free but it's really early in the morning so I don't care. You have your clear total in the basket and what you're purchasing. Sometimes, I do be naughty and order a Cadburys chocolate bar for £1 👀😂

If worst comes to worse, ask my parents or siblings to help me out because I'm not going without food. I have to eat.

Reply 4

Alisaurus Cats

I was super organised at uni and had a budget spreadsheet (and yes I still have one). I would have preferred monthly payments when I was at uni as I feel like most outgoings in life are monthly. I also saw lots of other people overspending and then scraping by or getting helped out by their parents so I do think that regular, lower installments would help with money management.

As an aside, I definitely think more essentials lifeskills should be taught - and from the earlier the age the better!

Reply 5

Truflais

In Scotland they're paid in monthly installments and I think it's much better tbh. You get your largest payment in Sept then half of that every month till May. It definitely makes managing everything easier IMO.

Reply 6

Alisaurus Cats

Original post by Precious Illusions

That sounds so much better. I was (mostly) good with my money management but even so I think that would have helped.

Reply 7

Truflais

Original post by Alisaurus Cats

That sounds so much better. I was (mostly) good with my money management but even so I think that would have helped.

I think that for a lot of students it's quite exciting finally having their "own" money if they haven't had jobs etc before. So they can probably be a little reckless when handed a fairly large sum. With monthly payments it's almost like a paycheck. You know that even if you run out of money etc you'll only have to wait until the following month. The termly payments are a lot more difficult in that sense.

Reply 8

Alisaurus Cats

Original post by Precious Illusions

I knew a guy who gambled away the majority of his first year loan so for sure. I think he was the exception to the rule however haha.

I did make a few indulgent purchases myself though thinking about it....but then I also had a part time job. And perks like student discount always helped!