So, you have obtained your first loans statement still what is this? You are being charged interest money? You should not panic. In fact, student loans are the cheapest means to borrow necessary money.
It can be a real shock for students when they graduate to discover they are being charged interest money on their loans. Certainly, your student loan is not free money and nor is it a negative way to borrow.
1. Borrowing money for education at a low rate of interest to invest in something helping you make money is a pattern of good debt. The student debt is good debt as you come from uni with a degree, which will boost the earning potential.
2. Student loans are a great way to finance your studies as you pay a low interest rate covering only the price of inflation. It means in real terms you pay back no more than you borrow. Depending upon inflation rates, you can even discover that you disburse no interest on the student loan.
No matter what the rate change is, you will not find another student loan, which is this cheap. Actually, the Government makes zero profit on student loans plus it subsidises the price of your education.
3. Student loans do not need to be repaid until the April when complete your course and only once you are earning ?15,000. The loan repayments are automatically deducted from the earnings as your income tax. The Sum deducted is about 9% of the amount you earn roughly ?15,000.
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