Come September students could be facing higher interest rates on their loans.
On 1st September the Student Loans Company will reset the interest rate payable and this is based on the Retail Prices Index (RPI) rate of inflation in March.
Obviously the recent rise in RPI to 4.4% in March means that students should expect to see an increase from the current rate of interest they are paying on loans.
There are different rules used to set interest rates depending on when the loan was taken out. Interest rates on loans taken out before 1998 are set based on RPI in March. However, interest rates on loans taken out after 1998 are set based on RPI in March or the Bank of England Base Rate (0.5%) plus 1%, depending on which is lower.
Craig Gedey Marketing Manager at Debt Advisory Line said: ‘Whichever loan category you may fall into as a Student Loans Company borrower this will mean higher interest rates.’
‘Students face record debt levels; according to the online credit report provider Callcredit the average student debt is £15,700 and the average student starting salary is £22,300.’
‘Any graduate with additional unsecured debts like a credit card or high street bank loan can speak to a professional debt adviser about a debt management plan if they are worried about keeping up with repayments.’
www.DebtAdvisoryLine.co.uk – Debt Advisory Line is the Debt Management Provider of the Year 2008 and 2009. We help people to get out of debt in the shortest possible time, because we know how stressful debt can be.
Call us FREE on 0800 157 7254 today for a confidential discussion.