Advantage of Availing a UK Loan

There are many different advantages and disadvantages of every loan offer in ever part of the globe. This article is tailored to let you know the benefits of availing a loan – a student loan in particular – in the UK compared to most countries like the United States of America

1. Student Loans

There are two types of student loans in the UK. The loan that covers your school tuition (Tuition Fee Loan) and the one that covers your everyday living expenses (Maintenance Loan). In the United States, student loans generally cover everything the students spend. This makes it harder for the student to manage his or her expenditures according to what he or she can really afford. In the UK, the loan is capped to a maximum amount they the students pay for annually. This makes financial planning easier and after university, the students will not be sitting on a heaping pile of debt to pay.

1. Paying back your debt

Of course, all loans must be paid but there is a very interesting way of payment in the UK. The borrower will only be required to pay once the individual has income of over ₤21,000 a year. Once that is achieved, loan payments are immediately capped at a rate of 9% of the borrower’s annual income.

Borrowers in the UK pay for interest rates too just like borrowers in the States. However, huge difference lies in the method of interest repayment. A certain metric is being followed that will determine the interest at which you will pay that will both satisfy your resting debt and your financial capability.

Another perk is that your repayment is taken out of your paycheck in the form of taxes. This is because all loans in the UK are handled by the government. Therefore, absolutely no need to worry about forgetting your monthly repayments, unless of course if you work abroad.

1. Circumstance based payment cancellation

If the debt still rests unpaid after thirty years and/or the borrower dies and untimely death, the remaining payment transactions to be made are terminated. In the United States of America, your debt repayment continues in spite of any unfortunate circumstance that presents itself along the way.

1. Cost of Education in the UK hasn’t increased

The cost of education lately in the United Kingdom has been on standstill save for the occasional tiny rises. The cost of college education has not risen as fast as it has in the United States of America. This is due to the fact that the UK government puts a maximum amount that schools can charge their students, therefore efficiently making the loans lower and much more affordable.

The things stated above are only some of the many advantages loans in the UK have over other countries. The differences are fascinating. Also, because the government in the sole public lender available for student loans, all of the perk mentioned above are very much implemented and are enjoyed by every student who availed for a loan in the UK. Also check out payday loan if you are short of cash or emergency cash that only requires small amount of money.

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