Student Loan - Loans and Debt Consolidation

STUDENT LOANS WILL COST MORE THINK MONEY

Student loans will cost more

By Nicholas Boyle - Financial specialist

Millions of people still repaying their student loans will now be worse off, as the Student Loans Company confirmed interest rates will be increased, the Telegraph reports.

Both those who took out student loans before 1998 and those who borrowed after this period will now be charged interest on their loans - after a period in which `those with older loans were effectively paid to keep hold of them`, and those with `newer loans` simply didn`t pay any interest.

The Student Loans Company said that those who took out their loans after 1998 will now pay 1.5% interest, while those who took out their loans before 1998 will pay 4.4% interest.

This effectively means that those with a balance of 10,000 will pay 150 a year if they took out their loans after 1998, and 440 a year if the money was borrowed earlier.

Figures show that in the UK, there are around 3.3 million people who took out a loan after 1998 and still have outstanding balances, while there are around 355,000 who took out a loan before 1998 and still owe money.

Source: http://www.thinkmoney.com