InterestWatch

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#1
Interest is applied on the amount borrowed straightaway, and not at the end of the course? So if 9000 is borrowed, at the end of the first year at 6% that is £540, therefore £1620 at the end of 3 years for that year, plus intest from the subsequent 2 years borrowed, etc. And not £27000 after 3 years?

Thank you.

William Carey
0
1 year ago
#2
For most people, interest begins accruing from the moment you take your loan out. You're right that it won't be £27000 after the 3 years of study but it's also not going up by a fixed £540 each year.

6% of £9000 is £540. So to simplify things, you owe £9540 after 1 year.
You then get paid an additional £9000, so £18,540. 6% of that is another £1100 or so.

The £540 is not fixed, interest is determined on the entire amount. So it won't simply be £1620 after 3 years. It's more complicated that but that's the rough gist of it.

I for example am currently looking at around £26,000. I'm in my second year, started second semester. I've had a full year of both the £9000 loan to uni and the maintenance loan, plus the loans that have been paid so far for this year
0
#3
(Original post by Acsel)
For most people, interest begins accruing from the moment you take your loan out. You're right that it won't be £27000 after the 3 years of study but it's also not going up by a fixed £540 each year.

6% of £9000 is £540. So to simplify things, you owe £9540 after 1 year.
You then get paid an additional £9000, so £18,540. 6% of that is another £1100 or so.

The £540 is not fixed, interest is determined on the entire amount. So it won't simply be £1620 after 3 years. It's more complicated that but that's the rough gist of it.

I for example am currently looking at around £26,000. I'm in my second year, started second semester. I've had a full year of both the £9000 loan to uni and the maintenance loan, plus the loans that have been paid so far for this year
Thank you.
0
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