6 Things to Know About Student Loans Before Borrowing

Getting into the university of their choice and pursuing the course sharing the highest aspirations is something that a student looks forward to. However, bridging the gap between education and rationalising the dream to prune a career in one of the top universities takes a lot of work.

The overarching cost of living makes it almost impossible for guardians to save for their children’s high education and career growth.

Student loans are one option that grants guardians the flexibility to halt their worries and fund their child’s education.

But, before leveraging these loans, you must be on top of what it takes to qualify. The blog states what you must be careful about while applying for student loans.

Some Aspects That You Must Know While Applying for Student Loans

Individuals use student loans to finance education and other related expenses while studying in Ireland. If you are a guardian or a student seeking undergraduate and postgraduate student loans, you must be familiar with some aspects.

Here are critical facts that would help you easily qualify for loans for students in Ireland and help you walk on the educational journey effortlessly.

1)      Identify the student loan eligibility requirement

Individuals applying for student loans must live in the UK/Ireland for nearly 3 years. They must be over 18 years to apply as a citizen of the country. 

The guardians here co-sign the loan with the student by providing the household income proof. The household disposable income decides whether or not you will qualify for the loans.

Apart from that, the person or the guardian must hold a valid bank account and a debit card as a citizen of the country. If you are applying as an international student, you must have a valid proof of visa and a referral letter to apply for the loan.

One must be mindful that one must apply from his hometown, not from another city. For example, if you have lived in Ireland for over 3 years, you cannot apply from other countries like Scotland.

2)      Identify which student loan to apply for

Student loans are broadly split into two primary categories- Tuition and Maintenance loans.

a)       Tuition loan

These loans cover education costs – books, stationery, library card, etc. Qualifying for these loans does not depend on household income. You can get up to €9250 to cover your course fee. You do not need to pay course fees if you have student loans (tuition fee loans)

b)      Maintenance loans

Unlike tuition fees, maintenance loans cover other living or lifestyle aspects like- paying for accommodation, rent, and personal expenses- like a laptop, travelling, etc.

It covers everyday expenses, and the provider releases it into the student’s bank account. It is different from tuition loans, as in tuition loans, the fund goes to the university. It does not cover any aspect related to the tuition fee.

Depending on your financial circumstances and need, you can apply for either or both.

3)      Time to apply for student loan

You must apply for student loans 9 months before the student session starts.

Keep updating yourself on the student finance and proceedings of your application

It will help you seal the deal in time. The provider may ask for additional or supporting documents.

Do not delay in providing the same. Keep documents handy to upload soon after the request. It would help the authorities clear your application more quickly. If you still need clarification, ask the authority if you plan to take a student loan.

4)      Student loans are not the same as other loans

Student loans differ from other personal loans in Ireland, like mortgages, short-term finance, etc. SLC and direct lenders provide these. But SLC is the prime regulator of these loans.  

With most loans, you start repaying as soon as you qualify for the loan.

In student loans, the student can start repayments once one completes the equation (3-4) years and gets a suitable job with a specific income bracket. If the student reaches the income bracket, he can avoid paying the loan ever. The amount you pay each month is pre-set as one grows in income. This needs to be included in other loan forms.

The repayments remain static in other loans. In student loans, the more you earn, the more you pay the provider. In other loans, you have the freedom to pay a higher repayment if your income increases.

5)      Interest rate calculation criteria

It is one of the most important parts of student loans. The interest rates depend on so many factors, like- household income, the credit score of the guardian, and other expenses that could impact the repayment potential of the personality.

The interest rate begins to accrue from the first payment until you pay the amount and the loan gets cancelled. The authority decides interest rates by basing Retail Price Index (RPI). It implies that the amount you owe may increase due to such economic impacts. But it would be a minimal increase.

6)      Check the student loan plan you are on

The repayments you will make on the student loans, generally depend on the student loan plan you are on.  Here are student loan plans to have a look at:

PLAN 1- English/Welsh/Northern Ireland/EU students who started the undergraduate course before 2012 or after September 1998 (the latest)

PLAN 2- English/Welsh/Northern Ireland/EU students who started the undergraduate course either between 1 September 2011-July 2023 or after September 2012 Wales.

PLAN 3-  A Scottish or EU student who started an undergraduate or postgraduate course anywhere in the UK on or after 1 September 1998

PLAN 5-

• An English student who started an undergraduate course in the UK after August 2023
• An English student who started an undergraduate course in England after August 2023

Check your plan and confirm the repayment starting date from the provider. It would help you avoid the hassle of repaying at the wrong time and for the wrong plan.

Bottom line

You must be familiar with these critical aspects of student loans before seeking them. It would help you avoid the unnecessary delay in applying for the session 2023-24 and grab the path to success without missing the chance.