Use our UK Finance guide and learn by experience. We outline pitfalls so that you don't have to learn the hard way, as many of us often do.
Loans
Studying isn't cheap. Looking at a Student Loan
From day one you will be hit with varsity fees, the insane cost of textbooks and a campus full of hotties with potential to suck your bank account. Dry before the first date has even begun. If your parents are tired of you leaching off them, you also have to factor in rent (food, laundry and electricity). As a student, you go out more than ever. You spend money on beer and cigarettes and gum and takeaways and condoms and airtime and redbull and noodles and other random shite than at any other time in your life. A student loan can help you pay for all these expenses. But it's really important to make sure that you know the ins and outs, before you sign on the dotted line.
A student loan's just like any other loan. You borrow money. You pay it back with interest. The difference is that you don't need to start repaying it your student loan until your finished studying. Each month you pay a small amount of interest to service your student loan. Once you have finished studying you will start to pay off the actual amount. The idea's that by then, you've have become so smart and employable that you will have no problem with the repayments.
If you are studying part time banks will assume you are working and studying and will expect you to start paying off the student loan, with interest, right away. The good news is that by starting to pay the loan off right away the loan costs you a lot less in interest.
Getting a loan - What you need to think about.
Before you dive into the deep end, it's a good idea to take some time to think just how much studying will cost. Make estimates for the total damages for fees, books, rent, transport, clothing and going out. The important thing is to be realistic. If you have factored everything in, the number will be scary, if not you have forgotten something.
Shop Around
Give the big banks a call, they all have student loan consultants ready to sink there teeth into the soft flesh of your neck.
Look carefully at all the rates offered by each bank. Interest rates aren't fixed in stone, so if you've been loyal to one particular bank for some time, you're a lower-risk client, and could qualify for a lower interest rate. Be prepared to call around, and play them off against each other. Be demanding. Depending on how much borrowing even a slight difference in the interest rate could make a really big difference to your pocket. Most banks will require that you open a transaction account and they may also offer you a debit or credit card.
Repayment
Most people pay off there student loan over the same number of years the studied for. If you're feeling a bit apprehensive it is possible to accelerate the repayments to save on interest. Larger student loans can be paid off over a longer period. If you are required to do community service, articles or an internship you can ask for a longer grace period before you start to pay off your student loan. Keep in mind because you're not officially working, full-time students need to get someone to sign surety for there student loan. That way if you go off the rails and drop it all on beer and pizza in a week the bank manager will be able to hit them up for the cash. You can get anybody to sign surety for you as long as they earn a regular salary.
While you are studying
The student loan interest payments will be drawn for your bank account by direct debit, so it is vital that there is enough cash in there to cover this each month. If not banks could slap you with penalties and extra interest charges for being a financial delinquent. Try persuading your parents to pay the interest charges while you are studying and then take things over yourself when you're employed.
