What To Look For With A Graduate Loan
There are many financing options available to students who have graduated from higher education. Once the student loan funding has stopped coming in, former students need a way of financing the transition from study to work. They need to pay for a new working wardrobe, travel to work and so on. They may also have existing debt that they need to pay off. This is where a graduate loan could be useful.
Graduate Financing Schemes
There are a number of graduate financing schemes offered by the high street banks. Some of these are aimed at particular professions, such as doctors, dentists and lawyers. Others are aimed at all recent graduates. What they all have in common is they offer a cheaper loan option than the standard unsecured loans.
Graduate loans are unsecured personal loans of anywhere from £1,000 to £10,000. Some banks offer loans as low as £300 or no minimum at all, while other offer loans of up to £15,000. The repayment periods vary widely, too. Graduate loans can be repaid over five to seven years, though some banks offer as much as ten years to repay and others as little as two years.
Low Interest Rates
One of the attractions of graduate loans is the interest rate, which is usually cheaper than those on standard unsecured personal loans. Typical annual percentage rates for graduate loans are between 6.9% and 14%. Many graduate loan schemes offer payment holidays of anywhere between a couple of months and a year. Borrowers should note, though, that interest still mounts up during this period, so you will find yourself with even more to repay. And if you happen to try to settle the loan early, there will be a penalty in the shape of an early settlement fee.
To qualify for a graduate loan you need to be a UK resident, over 18 and have graduated from your course within the last two or three years. Other eligibility criteria may apply depending on the lender. If you have had student financing with a particular bank, they may limit the amount you can borrow. They may also require you to amalgamate this with the new loan.
Questions To Ask
To choose your graduate loan, you will need to find out about the interest rate and repayment period and terms. It is also worth asking about fees for taking a repayment holiday, how payments are to be made, whether payment protection insurance is required and whether you can decide which day of the month the payment can come out of your bank account.
Using Your Graduate Loan
Many people use their graduate loans to consolidate debt because of the lower interest rate. Student loans already have a low interest rate pegged to inflation so it is not usually sensible to include this in the consolidation. Once you have got your loan, it is essential to make payments properly so that you maintain a good credit rating.
More Information:
Graduate loans are an increasingly common form of unsecured personal loans that allow new graduates to consolidate debt. For many people this is an attractive way to firm up their finances when making that first foray into the world of working full time-
What do you need to know about student and graduate loans? First, it's good to know that the interest on these loans is much lower than a typical personal loan. However, it's also important to know that a student or recent graduate can become locked into a relationship with a lender through these loans, so careful choices is imperative.
- Do You Qualify For A Career Development Loan?
If you want to boost your career prospects with some work-related study a career development loan (CDL) may be the answer for you. A CDL is available to the following people.
- Using A Career Development Loan For Postgraduate Study
We've all heard of student loans. These are the loans that help school leavers fund their university education. But what if you want to continue learning after you have left university and have started work? Luckily, not all loans for study are given to undergraduates. There are loans to help employed, self-employed or unemployed people with further study. They are called career development loans.
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