| Product: |
Student Loans Co. |
| Date: |
23/05/01 (86 review reads) |
| Rating: |
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Advantages: Cheap
Disadvantages: You Have to pay it back!
For most students starting university these days, there is no choice but to take out a student loan in order to pay off those tuition fees and living costs.
Having come from London, I understand that living costs are high in some areas, which is why having a student loan is essential.
I am lucky enough to have my parents pay for my tuition fees and my accommodation, although if I had to pay for these myself I wouldn't have been able to come to university as my accommodation is £2500 per year alone. A student loan is typically £2800, leaving me with only £300 towards fees.
However, I have worked hard over the year and I have managed to save up a fair proportion of my loan.
The Loan
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The student loan is issued by the Student Loans Company, which is related to the Government. The loan is available to all students, although it is optional if you wish to take it up.
It works like this: you get paid however much loan you request from your entitlement in three instalments- one in September, one in January and one in April.
You get this for your duration at university, and then once you begin full time work and are earning above a certain threshold, you have to pay back the loan, although this is deducted straight from your bank account or wages.
The loan is charged at a low interest rate, so it is pretty much an interest free loan. However, the level of interest is linked to inflation, so the interest can rise with rises in inflation. The Government states that the amount you pay back is the same amount that you borrowed in real terms, which is why the interest rate is linked to inflation.
Tips to Save Your Loan
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1. If you can, try to save a bit each month and put it into a high interest account. This is what I have been doing, and it's good to watch the money grow.
2. Try to avoid buying unnecessary items such as CDs and only tr
eat yourself to these when you feel you deserve them.
3. Don't spend all your money in the first week. Although there are hardship grants available from most universities, they won't keep you going for long.
4. Work during the summer holidays and earn some money so help you live off during term time in the first term. This is likely to be the most expensive time, so that extra money does come in useful!
5. Buy supermarket own brand products. These might not look great, but most of the time the taste is similar to branded products.
6. Look out for sales and offers in the shops, especially for CDS etc.
7. Shop on the internet- there are savings to be made.
8. Try to shop with friends, so that you can split the bill- it works!
Conclusion
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A student loan is a necessity for most students, but as long as you are careful, you'll be able to save some of the money and use it to help you pay the whole thing back later.
Summary:
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