Repaying Your Education Loan: UK Experts Lend a Helping Hand

Getting a degree entails a host of expenses covering tuition fees, books, living expenses on campus, transportation, and other school necessities. For most, the only way to finance their dream of getting a college degree is to turn to various financing instruments offered by both public and private institutions. In terms of options in educational loan, UK financial institutions have a lot to offer and it is not normally difficult to get such financial assistance. The challenge, however, lies in paying off money from educational loan UK financial institutions grant. Payment for these loans usually starts when a student has already earned his degree or when he has secured a paying job. When a graduate’s income is not enough to cover his student loan repayment amounts, a huge financial problem is sure to ensue.

If you foresee that you will be having difficulties in paying for your educational loan, UK financial institutions offering consolidation loans could be your source of relief. These institutions offer you consolidation instruments that would help you repay your educational loans in amounts that are more manageable to you given your meager starting income. Depending on the amount of money you owe, you can choose to consolidate your loan into a secured consolidated loan or into an unsecured consolidated loan with tenors of as short as six months to as long as 25 years. UK institutions usually require citizenship and attainment of legal age in order to avail of these loan consolidation facilities.

Those who have taken out government-funded student loans do not have to worry about their repayments if their salaries are less than £15,000 (to increase to £21,000 in April of 2012). When their salaries have breached the threshold, their loan repayments will be computed based on their income and a fixed percentage will be automatically deducted from their salaries every payday to go towards their government-funded student loan repayments. Since loan repayments for government-funded student loans are dependent on the borrower’s income, the period within which the loan should be repaid is not fixed. Should there be an outstanding balance left on the government-funded student loan after thirty years, any remaining loan amount will be waived and the borrower does not have to pay anymore.

Computing how much you have out of your earnings to spend on your repayments and finding a loan instrument that will result in repayment amounts within your budget will make it easier for you to make your regular payments. Most of the time, you will have to be willing to make adjustments in your spending to prioritize your loan repayments – some belt-tightening measures would definitely be necessary at least until your earnings increase to give you more financial resources to dip into. In a flat payment consolidated loan, even as your earnings increase, the amount of repayments you have to make will not increase. It might be a good idea though to look at your options at increasing your repayments to enable you to pay off your loan sooner and possibly with some savings on interest payments.