Things To Know About The Student Loan Repayment For The UK

While it has some obvious advantages for your bank account to find the right opportunity and eventually start making some real money, there is one obvious disadvantage: you actually have to pay back your student loan. Here are a few things you need to know about student loan repayment UK.

Repayments when you graduate

How do student loan repayments work UK? When you enter the workforce and start making more than a certain amount, student loan repayment UK begins. Through the tax scheme, they are repaid immediately and cease until you have paid them off.

It is important to know exactly what is involved with the restructuring of student loans and when you are prepared to begin making the student loan repayment UK. And it is never too soon to start budgeting for them.

What do you need to repay?

Your tuition fee loans, rehabilitation loans, as well as any postgraduate loans, will need to be repaid.

Loans for tuition fees (both post grad and undergrad)

For an undergrad degree in the UK, the tuition fees would be up to £9,250 a year. You will still have to repay these loans if you have taken out a postgraduate loan for a Master’s (currently up to £ 10,906) or Ph.D. course (currently up to £ 24,700).

Maintenance loans

It will depend on where you came from in the UK, your family household income, and whether you were staying at home or not, how much you were eligible to repay on your maintenance loan.

This is around £ 8,944 for students living outside of London in the new academic year (2019 to 2020) and up to £ 11,672 for students living away from home in London.

Others

Any loans or bursaries would not have to be repaid. However, once you quit the course for whatever reason, you would still also have to repay your student loans and maintenance loans.

Which plan are you on?

There are three forms of installment plans that you may be on: Plan 1, Plan 2, and the secure student loan repayment UK for postgraduate loans. Read on to find out what plan you’re on and what it takes for UK student loan repayment overseas.

Plan 1:

For students who began their undergraduate courses before September 2012, Plan 1 is the older plan. If you’re one of the following, you’ll be on schedule one:

An English or Welsh student who began an undergraduate course before 1 September 2012 anywhere in the UK.

A Scottish or Northern Irish student who on or after 1 September 1998 started an undergraduate or postgraduate course anywhere in the UK.

An EU student who, on or after 1 September 1998 but before 1 September 2012, began an undergraduate course in England or Wales.

Plan 2:

For students who began their undergraduate courses on or after 1 September 2012, Plan 2 is the new plan.

An English or Welsh student who, on or after 1 September 2012, began an undergraduate course anywhere in the UK.

An EU student who, on or after 1 September 2012, began an undergraduate course in England or Wales.

Someone who on or after 1 August 2013 takes out an Advanced Learner Loan.

When do you repay student loan UK?

After you complete your course, you can start repaying your student loan on 6 April (provided you meet the income threshold). If you are a part-time student, four years after completing the course, you can only begin the UK student loan repayment threshold.

How much interest will I be expected to pay?

If you are on Plan 1, the interest rate on your debt will be the base rate of the Bank of England plus one percent, or the inflation rate, regardless of which one is lower.

The interest is the Retail Price Index (RPI) plus three percent if you’re on Plan 2 while planning. Your interest rate will then be the existing RPI if you receive less than £ 25,725. If you receive between £ 25,725 and £ 46,305, the RPI plus up to three percent would be the interest rate (the percentage will rise as your salary rises). You’ll have to pay an interest rate of RPI plus 3 percent if you gain above £ 46,305.

How long to repay student loan uk?

Those in either Plan 1 or Plan 2 will currently pay nine percent of any amount you earn over the threshold. For Plan 1, this is when your income before tax is over £1,577 a month (or £364 a week). This threshold will rise to £1616 from 6 April 2020. For Plan 2, this is when your income before tax is over £2,143 a month (or £494 a week)

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