Things You Should Know About UK Student Loan Repayment

Student loan UK payments begin following the moratorium period (EMI holiday) or as soon as the borrower secures employment (whichever is earlier). However, interest is still accrued during the study and moratorium periods. Simple Interest is the type of interest charged during the research period, whereas compound interest is the type of interest charged after this time.

There are typically three methods of repayment.

SIMPLE INTEREST: In this instance, the borrower keeps paying the Simple Interest while he is a student. Consequently, simple interest doesn't keep increasing the principal, and the EMI is merely the principal amount plus simple interest. Additive Interest

PARTIAL SIMPLE INTEREST: In this arrangement, the borrower only pays a fraction of the simple interest, with the remaining interest continuing to be added to the principal. As a result, both the principal amount and the remaining simple interest will eventually be subject to compound interest.

EMI: In this instance, the borrower waits to make any payments until the moratorium term is up. Due to this, the interest is paid in EMIs and is compounded on the principal plus the simple interest.

Repayment begins six months after finding a job or one year after finishing a course, whichever comes first. However, you might choose to pay the simple interest during the Principal moratorium period, which offers some interest reductions, to lower the EMIs.

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