Student loans are a necessary burden for nearly everybody who is pursuing his or her education in the UK. The amount you are expected to pay back each month will depend on how much you are earning. But most importantly, it is going to depend on which plan you are on.
You are on Plan 1 when you are Northern Irish or Scottish-or simply a Welsh or English student who began an undergraduate course before 1 September 2012.
And you are on Plan 2 when you are a Welsh or English student who began undergraduate studies after 1 September 2012.
Plan A students begin repaying 9% of their income when they happen to be earning over £18,330. On the other hand, Plan 2 students start paying theirs when earning over £25,000.
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The Interest To Pay On Loans
You are expected to pay an interest of 1.5% when you are on Plan A. Those on Plan B are expected to pay an interest rate depending on the amount they are earning.
After How Many Years Is A Student Loan Written Off?
If you have been to a university in the UK, there are chances that you have some large amount of debt to pay off. This is because of skyrocketing tuition fees plus maintenance loans.
However, what a number of students as well as graduates may fail to realize is that this debt gets canceled for everybody after some certain number of years.
The students who studied at university in Wales and England after the year 2012 (when new higher fees were introduced) are going to have all their remaining student loans written off after 30 years from, to be exact, the first April after their graduation.
In Northern Ireland, the debt will be written off after 25 years while in Scotland it is after 35 years.
Anybody who began university education between 2006 and 2011 will get their student loan written off 25 years after graduation.
While the loans are wiped out about 30 years after you graduated, also they get scrapped altogether when you die. Unlike other types of debts, this one is not going to be added to your estate.
The same scenario happens when you became permanently incapacitated or unfit to work. There are a number of graduates with spare cash and would want to settle their loans as early as possible. However, a number of loan experts such as Bad Credit site recommend against this.
They argue that in most instances, since student loans are repaid only when you are earning sufficient amount of cash, and you do not have to repay when you are not earning enough money, and since they get written off after some number of years, you should not rush in paying them off earlier than you need to.
Hike On Interest Rates
Meanwhile, The Sun Online reported recently how millions of graduates and students face a 33% increase in interest rates that they pay on maintenance loans and tuition fees.
This hike in the interest rates is going to take effect from September, for the 2017-2018 academic year.
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