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# How is interest applied to student finance loan? watch

1. How is interest applied to student finance loan? Is interest added after every month or year or neither. I found the interest rates for each period of my life but it fails to specify how it's applied. Also, it says interest added to the loan balance after first payment (which is after my course). Does this mean that I don't pay the 3% + RPI interest on my student loan during the 4 years while I'm studying?
2. (Original post by theterminator)
How is interest applied to student finance loan? Is interest added after every month or year or neither. I found the interest rates for each period of my life but it fails to specify how it's applied. Also, it says interest added to the loan balance after first payment (which is after my course). Does this mean that I don't pay the 3% + RPI interest on my student loan during the 4 years while I'm studying?
Interest is calculated daily, and applied monthly. (If you pay the loan in full early the settlement figure is calculated based on daily interest.)

By first payment it means the first payment of loan to you, i.e. the start of your course, not your first repayment.
3. (Original post by applicationa)
Interest is calculated daily, and applied monthly. (If you pay the loan in full early the settlement figure is calculated based on daily interest.)

By first payment it means the first payment of loan to you, i.e. the start of your course, not your first repayment.
okay, can you correct where I'm wrong:

RPI + 3% is approx. 6.8%. In this case, if interest is calculated daily, then after a month you pay 1.068^28 of what you started with i.e. you pay over 600% of your initial loan. That can't be correct.

Can you show me a few calculations just so I understand it better please?

Thank you
4. Nobody cares about the interest when they're taking a loan like Student Loan
5. Hi, RPI + 3% is the maximum your loans go up per year. Every day you owe 1 /365th more of RPI + 3%. Hope that makes sense.

http://www.studentloanrepayment.co.u..._schema=PORTAL

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