Interest Rate
The amount to be paid back will depend on the amount borrowed plus the interest charged. Interest is linked to the rate of inflation and is adjusted each year in line with the Retail Prices Index (RPI). From 1 September 2008 to 31 August 2009 this will be 3.8%.
Change to Income Contingent Repayment loan interest rate
The interest rate payable on income based student loans has been reduced following the latest change to the Bank of England rate to 1.5% on Thursday 8 January. The new rate for income based student loans is 2.5% from 9 January until further notice. Interest is applied to loans from the date they are paid to you until they are repaid in full.
Why has it changed?
Student loans are not like commercial loans. They are subsidised by Government and attract a low cost interest rate. This interest rate is based on the annual March Retail Price Index (RPI) or the highest base rate of a number of major banks plus 1%; whichever is lower.
To date, the RPI has always been the lower of the two. The reduced bank base rate plus 1% is now lower than the March 2008 RPI so we have presently adjusted the student loan rate to 3%.
Student Loan
ReplyDeleteIf you have more than one loan, then student loan consolidation is for you. Loan consolidation is the process of reducing your many loans from different lenders and issuing a single loan from a new provider. There are significant benefits in loan consolidation, resulting in lower monthly payments and much less paperwork.
Student loan repayment options include standard repayment. Most student loan repayment periods are for ten or fewer years. The last repayment option is to pay a graduated amount during the repayment process, stepping up about every two years.
When selecting a graduated repayment option you make your payments over an extended time period. This graduated payment schedule is good for those who need the lowest repayment amount early in their repayment schedule. Once a loan is consolidated, your interest rate is fixed. This is true except when using the graduated repayment option.
This automatic process simplifies your payment and ensures that you never miss a payment. When you start to repay your school loans, consider student loan consolidation. Loan consolidation makes the repayment process easier to manage and provides flexibility.
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These are all great tips! Talking early and often is very important.
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Student Loan Repayment Strategy
I would love it if student loan forgiveness applied to me. I am graduating in a year and I'm afraid of the debt. I currently don't have a job to pay the minimum payback amount.
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