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Liz Hunter from Money Expert explains that student loans, which are forgiven after 30 years or at age 65, should be viewed less worryingly, as they don’t affect credit scores and can be managed with strategies like saving for a larger deposit for mortgages while rising interest rates make repayment more challenging.
Student Loans Are Forgiven After 30 Years or at Age 65 and Don’t Affect Credit Scores
According to the report of Mirror, as students finish college and start working, they face the challenge of paying off their student loans, which can be quite high. Liz Hunter from Money Expert explains that while the average loan balance is now about £48,470, it’s less worrying than it seems. Unlike regular loans, student loans are erased after 30 years or when the borrower turns 65. You only pay back a portion of the loan if you earn above £25,000; if you earn less, you might not have to pay anything at all.
Hunter clears up some common myths about student loans. They don’t affect your credit score, but they can influence your ability to get a mortgage because they are considered in your overall financial situation. To improve your chances for a mortgage, you can save up a bigger deposit and cut down on other expenses. She also points out that teachers in certain subjects can get refunds on their student loan payments.
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£48,470: Expert Advice on Managing Student Loans and Repayment – Must Know! (PHOTO: Financial)
High Interest Rates on Student Loans – Why Reducing or Removing Them Could Ease Repayment Challenges
Rising interest rates, which can be up to 5.6% for newer loans, make repaying student loans harder. Hunter believes these high rates should be reduced or removed because they increase the total amount you have to repay. She suggests that graduates think carefully about whether it’s better to pay off their loans early or use their extra money in other ways.
READ ALSO: Teachers’ Union: Student Loan Forgiveness and Progressive Policies Win Over Educators
