Student Loans APR?

Senor_Scrooge

Hi - first time on the forum so hope this message is OK.

Daughter is hopefully starting Uni Sept 12 to study medicine which could be5 or 6 years study depending on whether she intercalates or not.

I have read quite a bit about how interest is applied to the loans and thereis the student phase and the post graduation work phase.

In the student phase interest will compound so the eventual balance willsubstantially exceed the amount borrowed ie £45k or £54k - for purpose of thismessage I am excluding living cost borrowings. What is the APR for this phase?

In the work phase when 9% of earnings over £21k are deducted from grosssalary to repay the student loan. However these repayments are only paid overannually by the employer and meantime interest charged is compounding theampount owed so again what is the APR?

It will be interesting ( pun intended) to see the outcome of thecalculations for the above scenarios :mad:

Poolie

APR is the Annual Percentage Rate which is usually associated with financial products.

Student Loans attract inflation (RPI) + a percentage during study and once salary is above the set threshold.

liviboy

The other part to remember is that whilst HMRC only pass-on the money to the SLC once per year, the payments are entered monthly so that the correct amount of interest is paid.

So your interest is charged as if you were paying it monthly, despite the money only moving once a year.

Hope that clarifies your end point.