Im a scottish student heading to study in England

Should i be worried about how paying back my £37,000 in student loans to cover me tuition fees will affect my future plans in life or does it sound scarier than it actually is.

Original post by Louis donnachie

Should i be worried about how paying back my £37,000 in student loans to cover me tuition fees will affect my future plans in life or does it sound scarier than it actually is.

Hey Louis 👋

It sounds a lot scarier than it is! You only start paying back after graduation when you earn above the threshold which is around £25,000 per year. You pay back 9% of whatever you earn above £25,000. So say your salary is £30k, you're only paying 9% of £5k. When you start a new job it will ask you for your student loan information and the payments will get deducted from your paycheck each month, just like tax and national insurance is. A much 'better debt' than a credit card or bank loan in my opinion

Hope this helps ☺️

Essex Student Rep - Hayley

Reply 2

Louis donnachie

OP

2

Original post by EssexStudentRep

Hey Louis 👋

It sounds a lot scarier than it is! You only start paying back after graduation when you earn above the threshold which is around £25,000 per year. You pay back 9% of whatever you earn above £25,000. So say your salary is £30k, you're only paying 9% of £5k. When you start a new job it will ask you for your student loan information and the payments will get deducted from your paycheck each month, just like tax and national insurance is. A much 'better debt' than a credit card or bank loan in my opinion

Hope this helps ☺️

Essex Student Rep - Hayley

Hi Hayley,

Thankyou for the response, will my debt from the student loans have a bad effect on getting a mortgage and finance in the future

Original post by Louis donnachie

Hi Hayley,

Thankyou for the response, will my debt from the student loans have a bad effect on getting a mortgage and finance in the future

Hey Louis,

This is quite a good article that helps explain how your student loan would affect a mortgage application:
https://www.moneysavingexpert.com/mortgages/student-loan-mortgage-impact/

How I read it, a student loan wouldn't affect your credit score unless for example you hadn't declared it and hadn't been paying it back as you should do. That's why if you decide to go self employed you need to look into your finances carefully as the onus is on you to make sure you're paying tax and student loans back correctly.

A mortgage lender looks at the affordability aspect of you being able to afford mortgage payments, taking into consideration how much of your earnings are spent on monthly expenses. So your loan repayments are a part of your monthly expenses just like car insurance, phone bills, gym memberships etc. They want to make sure that you can afford a mortgage on top of all your other monthly bills.

In a nutshell, student debt isn't viewed the same as rent arrears or credit card debt, like something huge hanging over you that you must pay back immediately or you'll never be able to do anything. Hope that makes sense

Best wishes
Essex Student Rep - Hayley

Im a scottish student heading to study in England

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