Many people of all ages throughout the UK know how it feels to be stuck under the crushing weight of massive student loan debt. If you want to repay the money you owe as soon as possible, you will need to get some helpful tips and advice first. In this article you will learn about some of the best ways to get rid of your debt so you can start living your life again. As hopeless as your situation might seem, there is a way out.
How Repayment Works
The very first thing you need to know is how repaying your student loans work. Once you graduate, your loan payments will be taken out as part of the tax system. This is the same whether you are an employee of a company or have your own business. Even those who are working overseas will still be taxed for their student loan repayments.
Student Loan Types
You can get either mortgage style or income continent student loans. A vast majority of people in the UK have contingent loans. With contingent loans, there are two individual types of repayment plans.
The first repayment plan applies to wherever you went to school in the United Kingdom. The second repayment plan is only for those who have studied in England or Wales. Mortgage style loans are only for those who began going to school prior to September 1998. These loans have a fixed term.
When does Repayment Begin?
You won’t really have to start paying back your student loans until 6 April after you have completed your schooling, but it doesn’t begin until the following year. If you have a Plan 1 loan, payments will be taken out of your paycheques when you begin making more than £18,330 annually. If you have a Plan 2 loan, you won’t need to start paying it back until you are making more than £25,000.
Your Income is No Secret
Student loan companies will know exactly how much you are making from your job by using your National Insurance number. They tell HM Revenue & Customs to alert your employer so that the appropriate amount can be taken out of each paycheque you receive.
You won’t have to content with a repayment deduction if you start making less than one of the two amounts specified above. If you begin making less than that at any point, you won’t have to make any repayments until your income has risen appropriately. It is important to keep in mind that these loan companies always know what you make, so you cannot hide this information.
Self –Employed Individuals
Those who are self-employed will find that HMRC determines the total amount that you owe based on your tax return documents. When you are going about filling out doing your tax return paperwork, you need to select the student loan option. Failing to do this is illegal and could get you in big trouble with the government.
If you plan on working overseas for more than three months, you will be required to submit an Overseas Income Assessment document. This paperwork will ask you to provide income information that will determine what your repayments are going to be.
Repaying Your Student Loan Sooner
You certainly have the option of paying back your student loan early, and it is something that a lot of people want to do. There is always the option of making individual payments to the student loans company directly. The more you pay them, the sooner you can gain financial freedom. It is highly recommended that you do pay extra, as it will ultimately help you save money. The larger your student loan repayments, the less interest you will have to worry about. Alternatively you could take out a loan via a company like Omacl.co.uk to repay it back quicker.
There are plenty of ways to get your loans paid off earlier, such as taking on a part-time job. The more money you make, the sooner your debt will be taken care of.
If you are struggling to repay your loans, it is important that you contact the student loan company right away. Let them know that while you are making enough to have the repayments taken out, you are unable to live comfortably. There is a chance that your repayment amount could be temporarily decreased until you are on better financial footing.
Budgeting is Important
One of the best ways to ensure that your loans get paid off as soon as possible is to start budgeting. Make sure that you write out a detailed budget with all of your recurring monthly expenses. This will help you to know exactly how much you can afford to pay back. A budget will serve you well throughout your entire life, but it can be especially helpful with taking care of student loans.