When you want to continue into higher education, it’s likely you’ll need some kind of loan to financially support you. Whether it’s a loan to just pay your school tuition fees, a loan to help you afford living costs or both, it’s common to need some sort of help. However, getting a loan isn’t as simple as you think. There’s often a lot of hoops you need to jump through in order to meet the loans criteria. Once you have obtained the loan, you then need to think about your ability of paying it back. This isn’t usually thought about until higher education is completed but here are 3 things to consider to get ahead of the game.
When you pay it back
The time you get to pay back your loan can vary between loan providers and where you live. If you live in the UK, you need to earn a minimum amount before you can start paying back your student loan. This is so you can afford your basic necessities, like food, accommodation, and other bills before having to worry about other loans. This is the same for Australia too. If you live somewhere like America, you often have a six-month grace period after finishing school before paying it back. This is so you can get settled out of school and will have hopefully found a job by then. This grace period can vary from state to state and is sometimes nine months, but six months is usually the standard amount of time.
Missing a payment
Making payments to your loan provider can also vary as well. Depending on your provider, the amount you pay and how you pay can differ. If your employer can do so, they can link your student loan repayment plan to your payslip so when you get paid, the money you owe for that month can directly go to your loan provider. This means you don’t have to worry about going out of your way to pay your provider and it’s done for you. However, not all employers have the ability to do this and it’s often up to you to pay the loan payments yourself. Similar to having your payment plan linked, you can set up a direct payment plan for your loan and have that money automatically transfer between accounts when best for you. Your loan provider can help you do this if you give them a quick call. You may be wondering what happens if you were to miss a repayment. A missed student loan payment is not ideal but it’s also not the end of the world. It can damage your credit score and a loan provider can add late fees to your payment, however, if you have missed the payment for a valid reason, like a job loss or divorce, you may be able to have any additional fees removed and work out a new repayment plan. If you have missed the payment because of your own error and something that could have been avoided, the charges will likely remain. To avoid these problems altogether, speak to your loan provider as soon as you know you’re going to miss a payment and see what they advise.
As with any loan, there’s interest. Each loan provider will set their own interest rates but it’s usually between 4-5% which can be seen as quite a lot. However, the bigger the payments you can make each month, the less interest you will have to pay. For smaller payments, you will be paying the loan off for longer which means that you’ll end up paying more interest than someone who can pay it off in fewer years. Again, this is something you can discuss with your provider to make sure you’re paying what you can afford.
You can check out your loan eligibility online with ease.