Good debt management news for students
Good debt management news for students
- Thursday, 21 May 2009Students' propensity to manage debts could be improved in the coming months as the interest on their loans goes to zero, it has been revealed.
Financial charity Credit Action has been campaigning recently for the government to honour its pledge to base student loans interest on the retail prices index (RPI).
This stood at -0.4 per cent in March - when the interest rates are due to be recalculated.
And the debt management news for students now is that the government has stuck to its promise, meaning loans should go interest-free from September 2009.
For anyone whose loan was arranged before September 1998, meanwhile, the outstanding balance could help to manage debts still further.
This is due to the fact that earlier loans match the RPI index exactly - meaning any amount still owed should start paying back at a rate of 0.4 per cent.
Previously, Credit Action noted that newer loans are the cheaper option when inflation is high, due to a clause capping their interest rates at one percentage point above the rates offered by a number of UK banks.

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