The complex bit (repayments)
Off to uni in September and applying for Student Finance, but not sure what will happen once it comes time to repay your loan? It may seem a long way off, but itâs handy to know. We talk you through what youâll need to pay and when.
Time to pay back
You only have to payÂ back your Tuition Fee and Maintenance Loans, but not other financial help like grants and bursaries. You will still have to repay your student loan even if you leave your course early, but the earliest you start repaying is when your annual income is over Â£21,000.
You pay back 9% of your income over the minimum amount of Â£21,000. Below shows what this would look like:
|Your income per year||Monthly repayments|
|Â£21,000 and under||Â£0|
Interest is a set amount you pay for borrowing your Student loan.Â Interest starts being added to your loan from when you get your first payment at the start of your course. While youâre studying, interest is inflation (which means the rate of increase) plus 3%.
|Â£21,000 or less||Inflation|
|Â£21,000 to Â£41,000||Inflation plus up to 3%|
|Over Â£41,000||Inflation plus 3%|
What if I canât find a job after uni?
The idea is that you only pay when you can afford to. So you donât make repayments if you canât find a job, lose your job or if youâre earning less than Â£21,000 a year.
Some good and bad things aboutÂ student loan debt:
- It wonât make it harder to borrow more in the future â it doesnât affect yourÂ credit rating.
- It wonât be a hassle to pay â it comes out of your salary before you see it.
- You wonât ever be faced with a lump sum to pay.
- You wonât have to pay it back when youâre unemployed or not earning much.
- It will mean that your monthly repayments go up as you earn more.
- You will have interest added to the total debt each month.
- You willÂ probably have to pay your loan back even if you drop out of your course.
Donât forget to check out our article on saving money on your degree.