Tips to Choose the Right Student’s Loans

Students often need to take loan for financing their studies. Although, taking any types of loans is not advisable, when it is unavoidable the key is to choose the right debt. The following are some of the best and the must suitable loans for students. They are given in the order of their suitability.
Official Student Loans

The first preference: The official Government-backed Student Loans Company loans are the cheapest long term debt you will get anywhere. The interest rate is currently 3.8% only. Hence, it should always be the first place to borrow from. You will be given two loans, one to cover tuition fees and one for maintenance which is also known as a living allowance.

You needn’t repay anything until you finish your studies and earn an income. The repayment depends up on the amount you earn. If you earn more, then you can repay accordingly. Another benefit is that if you earn less than £15,000 you won’t have to repay it at all until you start earning more than that.

Student Bank Account Interest-free Overdrafts

Second Preference: Big commercial banks are very interested in doling out loans to students because they hope potential high earners will stick with them for life. Thus they present interest-free overdrafts to attract good students. An overdraft means you can spend more money than there is in your account. It is same as borrowing. Normally it’s expensive, but for students it’s usually 0% up to a set limit, in other words you don’t pay to borrow this money. But the draw back is that once you stop studying the banks will start charging an expensive commercial rate of interest, whereas student loan debt always remains cheap.

Avoid all other debts

Almost all other debts available for students needed to be avoided. This is basically anything charging a commercial rate of interest, usually above 5%, such as credit cards and bank loans. If you don’t have sufficient income to repay the debts means the interest will compound and end up as a huge financial burden.
Grants and Scholarships

If you are member of University/College and eligible for the entire Maintenance Grant, then the university or college is required to give you a £310 or more bursaries which doesn’t have to be repaid. Students suffering financial hardship may get access or hardship funds; there is no one definition for ‘hardship’ so if you feel you need it you free to apply.
Also try the university’s welfare department; student parents, those with disabilities, or other special circumstances may receive extra cash and those studying medicine and related subjects or new teacher training students also have payments available. Plus try the Students’ Union, it may have its own independent hardship fund and be able to help out there.

General Scholarships

Whether you’re short of cash or not, there are plenty of scholarships for academia, sports, and hobbies or even just for being the child of a parent with a particular occupation. Use the Scholarship Search website, or go to a local library for a wider range of grant directories. The Educational Grants Advisory Services also offers data on alternative funding, including educational trust funds.