Make a profit on student debt (Student Loans Co.)

Name: chrisbrn

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Product:	Student Loans Co.
Date:	20.06.01 (300 review reads)
Rating:

Advantages: Low APR in relation to inflation, 3 instalment dates, monthly interest and no pay back until you earn over £15,000

Disadvantages: So tempting to spend the money, Adds to already high student debt after tuition fees, Share can go up as ell as down.

I have been a university student for three years now with this year being my third, and I have taken out a loan every time. I have not needed the loan for any reason, so I decided to invest in onto the stock exchange, which I have made a bit of money out of so far due to take overs, but it can be very risky. If you do have a Student Load, the best thing to do is invest it into a 5 year bond as the interest is about 4% more than anywhere else.

This works out by the interest that is paid on the loan which this year is about 2½% and a interest account is about 7% in places. You will need to look around for places though. If you want to place money on the stock exchange, Airtours and Budgens are looking good for this year and next to invest your student loan into (although airtours have gone down a bit after being at it highest share price for 3 years, whilst budgens have seen its highest share price since floatation this year and has maintained it high price).

Some banks do also give you about the same rate of interest and pay off in a shorter period of time, but look around for the best deals.

Most students though think that because they have just got £950 into their bank account, that it has to go onto beer, fags and everything else, but you can always find a cheap supplier somewhere for both of them, including computer software.

There are always cost cutting when a student in any area of the country in cheap things. When a student you need to look towards the future and making money, and if you spend the loan, you will be in debt. I have invested mine, and I make about £400 a year profit. That is nearly £1000 in three years for doing nothing!

My lecturer said to invest it into a house, and you will awlays (about 90% of the time) make more money on an investment on a house, But then you need to keep up with the payments, so be carefull.

It is well worth taking out a loan, only with the intent to invest, othe
rwise you will suffer in the future with payback. The interest is calculated on a monthly basis, so in the long run you pay more. You are looking at first year interest being about £10 a month, and that increases every year, and even more if you take out another loan.

The instalments come three times a year, one in Nov / Dec, Jan, and March so it is in line with when the tuition fees get paid.

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