No Loan Sharks Here! (Student Loans Co.)

Member Name: blackjane

Product:	Student Loans Co.
Date:	09/07/00 (45 review reads)
Rating:

Advantages: Low interest rates; The lump sum could some in useful

Disadvantages: A fair degree of will power is required!

Student Loans Company

[Background: the only way to get through University these days is to take advantage of Student Loans. Despite receiving a mixed reception by the media, these loans can be a lifeline to students and can be very useful after you have left University as I will now recount]

I finished my three year stint at Salford University exactly seven years ago now, and was one of the first guinea pigs to try out the Student Loans scheme.

I have no complaints about the system and in truth it really worked in my favour.

Although I didn't strictly need the cash (my parents helped out and I also worked part time in the holidays) I took maximum loans in all three years. This only amounted to about £2000 - £2500, which I then paid off at the rate of about £30 per month at very low interest rates. These interest rates are linked to the retail price index (RPI), which are currently between 2% and 3% per annum.

Rather than letting the cash burn a hole in my bank account, I invested it in shares and governement bonds, which eventually allowed me to provide a deposit for a house, once I'd been working two or three years, and had sold the shares and cashed the bonds.

I know that some people will say that the amounts of the loans now (£4,000 or more a year) are over the top, but think about it ... you will still probably only be paying the loan off at £100 or so a month, provided you are earning above £15,000 a year (anyone earning less can defer payment until later).

Therefore it is feasible to pay the loan off over five years and use what's left of the lump sum (if you invested it wisely) towards your future life.

This course of action may need some will power, but is an investment that should pay off in the long term - it did for me.

{An opinion by Blackjane - 2000}

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