Maximising Your Student Loan
What DON’T you have to pay for?
For some people, just thinking about how to stretch student loan instalments to cover everything they need is enough to bring on a bout of stress. This makes it even more tempting for them to ignore their bank account entirely, which only piles on additional stress in the long run. If this sounds familiar, then you’re in the right spot.
If you want to manage your finances better this year, start by making sure you know exactly where you can find savings or even free things as a result of being a student. When combined, they can result in massively reduced monthly spending, giving you greater peace of mind and letting you do more with your money.
Here are 7 things you don’t have to pay for as a student, and areas where you can save extra cash.
Council tax
If you live in a household that’s made up entirely of full-time students, then you don’t have to pay council tax (the council will send you a letter about this which you can respond to). If you live with one other person who isn’t a student, then you can get a 25% discount on a full council tax bill.
Bills
Unfortunately, household bills are still a reality in the bubble of student life, but there are ways you can reduce and streamline them. For instance, you can look into household shared billing, which is a great way to take out some of the hassle and allow you to plan better for your monthly payments.
Sites like Glide take care of your internet, energy, TV license and water bills, provide you with a quote and then give you clear payment plans split between your household on 6 or 12-month contracts, so you know exactly how much you’ll need to pay and when throughout term time.
Full price
Many students don’t scratch the surface of all the discounts available out there. There’s Totum, the discount card recommended by the National Union of Students, as well as Student Beans, UNiDAYS and much more. Then there are websites that want to send free and discounted items to students, particularly samples, so take a look!
You should also investigate money-saving tools that are open to all, such as cashback sites like Quidco and Topcashback.
Interest on overdrafts
There are lots of reasons you may need money on top of your student loan and job income to get through university. In this case, you may need to consider a student bank account with an interest-free overdraft, or a student credit card. Many of these come with additional perks like vouchers and railcards, too.
Just make sure you do your research into the conditions by speaking to someone at the bank or with a free financial advisor, for example at the Money Advice Service. Be cautious with your spending, don’t let your debt get too high and be aware of any interest that will begin to accrue once you graduate.
Grants and bursaries
It may sound obvious, but you should look into all the different grants and bursaries your university offers. That includes means-tested bursaries for students from low-income backgrounds, on specific courses or with additional needs such as childcare; plus, scholarships for high-achieving students and even grants for specific projects and courses.
If you are seriously struggling, some universities offer hardship funds that can be accessed in emergencies.
Tax on income under £12,500 a year
If you earn less than £12,500 a year, you don’t need to pay income tax, which starts at 20% on earnings over that amount. Bear in mind that this means the amount you earn cumulatively through any job, even if you have several different ones.
If you’re paid through a PAYE (pay as you earn), your income tax gets deducted automatically and you might end up overpaying if you’re put on the wrong tax code.
You might also overpay if you take on short-term, full-time work over university breaks which makes it seem as though your annual income would add up to more than £12,500, even though it doesn’t. Usually, HMRC will eventually realise this and send you a tax rebate, but if you need the money sooner then you should check your exact status online and contact them.
National Insurance above a certain rate
You aren’t exempt from National Insurance contributions as a student, but as with your taxes, the nature of student work (which is often short-term or involves work for a variety of employers) may mean you overpay. The best thing is to use this government tool to calculate how much you should be paying.
Private Student Loans
It always helps to know where you can save money, especially if you’re a student worried about your financial situation. These are some of the areas where you can save, and free up more of your time to focus on things other than money.
If you do happen to get caught between your student loan instalments, you can always consider applying for a private postgraduate student loan to bridge the gap. Make sure you do your research and look out for competitive rates and terms that allow you to make an early repayment instead of locking you in long term.
Representative Example: Assumed borrowing of £30,825 over 120 months at 12.73% APR representative. Monthly cost of £509.26. Total amount repayable of £61,199.65. Interest rate of 11.62% p.a.(fixed) and total fees of £925.00. Available for loan amounts between £5,000 – £100,000.
(Representative Example date: October 2024)
Guest post by Rebecca Clarke
Rebecca Clarke is a UK-based freelance writer, caffeine addict and amateur baker. When she is not writing articles on relationships, mental wellbeing or life hacks, she can usually be found in her kitchen following Mary Berry recipes.