Student loans are issued by the Student Loans Company to full-time students to help with cost of living away from home whilst studying. The interest on student loans is linked to inflation, so they are cheaper than other types of loans and you don’t have to start repaying them until after you graduate, get a job and attain a salary above a certain level.
Interest rates are currently at 1.5 per cent and have been since September 2010. They are easily the cheapest long-term debt you will ever be able to get your hands on. The Student Loans Company provides two types of loan. Firstly to cover tuition fees and secondly to cover maintenance costs.
You can currently borrow up to £6,900 depending on your circumstances and you don’t have to repay until you are earning more than £15,000. The rules and levels of borrowing allowed for student loans may change as the coalition government is introducing tuition fees to be charged by universities and payable by students from the beginning of the 2012 academic year.
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