Many people worry that their student loan will have a negative impact on their credit report but, a student loan will not be listed on your credit report-whether you pay it or not.
Unlike other forms of loans you will probably encounter later on in life, with a student loan no one will harass you for failing to make repayments. Many creditors will not even be aware that you have an outstanding student loan simply because they will not even request this information.
If you are repaying a student loan this may show up when you debt to income ratio is calculated when you’re applying for a mortgage or vehicle financing.
Making over-payments on student loans
It’s not worth it to make overpayments towards a student loan simply because what you pay does not depend on how much you borrowed but on how much you are earning.
The answer is pretty clear cut the HMRC will inform your employer and who will cease making payments and your salary will then increase accordingly.
Once you’ve been granted a student loan it’s a good idea to begin planning how you’ll manage your money by creating a budget. If you begin a habit of creating and sticking to a budget from early on you’ll certainly develop the ability to effectively manage your finances in future.
You need to add up all of your monthly income including any money coming from a maintenance loan or grant, from your parents and from any part-time job you may have and work out how much you need to allocate to each expense starting from the most essential.
Your tuition fees, rent, utility bills, food and transport costs are all considered essential and any money left over can be allocated to other expenses as well as non-essential items such as entertainment and luxuries.
Student budgeting tools & resources
There are a range of simple and effective student budget tools available online that can help you create an effective budget. Students are also entitled to many specials, discounts and free deals for anything from cell phone deals to fast food vouchers and more so shop around for the best deals and make the most of the benefits you get from being a student.
Open a student bank account
A good choice for students is usually an account that has the largest 0% interest overdraft available. This will allow you to borrow without incurring any interest fees at all-you simply need to repay the amount you’ve borrowed.
Interest free overdraft accounts are available only to students so do take the opportunity. You can also allocate the money you borrow from the student overdraft to a savings account-it won’t make you rich but any extra income and savings will go a long way.
If you do go for a student overdraft account make sure you don’t exceed the overdraft limit and that you clear the balance before the 0% interest period is payday loans Mississippi up.
To open a 0% overdraft account or any other type of account you may choose you need to bring an Identity Document, proof of address and a document that proves you’re a student.
Building good credit as a student
While your studying you can certainly takes steps to improve your credit report and make it easier for you to get important personal loans to finance a car or home in the future.
As mentioned previously, your student loans are not included in your credit report and neither are fines, gambling activities or criminal records. What will certainly be in your credit report are your loan history and any banking activities such as those done on your credit card.
