The burden of student loans in the UK is high. According to an article by the Guardian in 2017, student loan debt rose to £100 billion. This is an indication of the hefty costs that young people have to face for them to acquire university education. As a result of their incapacity to repay student loans, graduates have their credit reports affected.
A default on one’s student loan makes it difficult to borrow money in the future. Based on the above statistics, it’s evident that many graduates default on student loans. So, how long do defaulted student loans stay on credit report? Generally, a default stays on a credit report for six years, but several factors are unique to UK graduates.
Factors Affecting How Long Defaulted Student Loans Stay On Credit Report
According to Experian, an Irish credit reporting company, one’s default on loans will stay on credit report for six years, beginning on the date of the default. But how does it work in the case of UK students? The repayment of student loans begins after one’s graduation. One of the factors that determine the repayment of student loans is if a graduate is employed or not.
If, for instance, one does not get employment after graduation, you can’t repay the student loan until you get an income. Again, if after graduation, a graduate starts earning an income, he or she should be earning enough to start repaying the student loan. The graduate can only start paying for the loan if he or she earns £21,000 and above in a year.
Another factor that affects the repayment of student loans is the period of time that should elapse for the debt to be written off. According to the UK government, graduates discontinue paying their debt after 30 years. So, even if you haven’t finished paying your student loan when 30 years are over since you graduated, the debt is simply written off.
Moreover, if one is unable to get any source of income for whatever reason, the repayment of the loan is not possible. For example, one can get a medical complication that hinders him from working, thus being unable to work towards repaying the loan. In the same vein, in the unfortunate event of one’s death, paying the student loan is not possible. So, in such a circumstance, one’s defaulted student loan ceases to reflect on the credit record.
Loan Option For Those With A Bad Credit Record
For those with a bad credit record, it is difficult to get loans. However, you can still borrow money through NowLoan. NowLoan connects you with potential lenders you can get loans from, even if you have a bad credit record.
For example, you can get a secured personal loan that requires you to have a guarantor who can pay the mortgage on your behalf in case you default. A guarantor can be either a friend or a member of your family.
Thus, having a bad credit record shouldn’t deny you the opportunity to get loans. NowLoan allows you to access loans in a faster, flexible, and convenient way. You won’t have to pay any amount to access this service, and, in the end, you will get offers from different lenders for you to choose from. Hence, even with a bad credit record, you still have options you can explore to get loans.
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