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Personal Finance. Student Loans Debts Do Not Go On Your Credit Record.


by: Michael Challiner

Every time you apply for credit, for example a credit card or a loan, the lender will request to see your credit history from a credit reference agency. The information they hold is so detailed that there's really no need for us to fill out that long application form, because within a fraction of a second they can see all they need to know from Experian, Equifax or Callcredit, the three main credit reference agencies. You would be very surprised to see just how much they know about you.

Banks, building societies and other financial institutions providing credit have been passing on details of your financial transactions to the credit agencies. Every time you apply for a credit card, every time you miss a mortgage repayment it gets noted. They know whether you pay the minimum or the balance each month, they even know details of your credit limit on each credit card. They also look to public records, the voters' roll and the public register of court actions because that is where all county court judgements are listed. It all happens automatically, and when your credit history is requested, the computer will provide a statistical analysis of your financial habits and provide an assessment of your suitability. It enables, the industry argues, lenders to make an accurate judgement about whether they should lend you money or not.

However, there is one piece of financial information that the credit agencies are not allowed to access, and that's the student loans. Despite the industry's remonstrations to the government, nothing has changed, and they are not allowed to access the information. The reason? Student loans constitute a debt to the taxpayer, they were not funded by commercial business.

Before September 1998, the student loan system worked like this: once graduates were working and earning the national average, which was 15,000 at the time, they had to repay their loan on a monthly basis by direct debit. 59,000 of those pre-1998 graduates still haven't started repaying their loan, and each has on average a debt of 2,750.

In September 1998, the student loan system changed, and the system remains the same to this day. Now, repayments are taken directly at source, straight from the salary in the same way as national insurance and income tax. This method has been a lot more successful.

The lending industry is not happy about the student loan situation, their main argument being that they need to know, when considering an application for credit, if the applicant has extra financial responsibilities. The introduction of top-up fees resulted in increasingly large student debts, and as the post-1998 loans have to be paid off at a rate of 9% of the graduate's income once it has reached 15,000, it is a large portion of income to lose.

The Association Consumer Credit Counselling Service made the following statement: Knowing whether a young person has a student loan and whether it is being paid back, is useful. So they are in agreement with the lenders.

The Citizens Advice Bureau is also keen to have the information made public, because they feel that graduates could be taking on too much debt, and if lenders could see their student loans, they would ensure that graduates are not given the ability to borrow beyond their means.

However, the Department for Education and Skills is showing no signs of wavering on its decision to keep individuals' debts to the Student Loan Company private.

For the foreseeable future the situation will remain the same and student loans information will be inaccessible to the credit industry.

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You may not own a property to take loan against or simply you do not wish to risk it for a loan.

The old property however will take time to sell. You not only make much required home improvements through secured home improvement loan but the loan goes a long way in making your home of more value in the market and its equity thus rises. Since unsecured personal loan for tenant is unsecured loan, there is no need for tenant to offer any collateral. Payment Flexibility Just like the name of the loan states, you have different payment options.

You have to pay the funding company for that extra cash in the business and potentially at a later date request more funding if say you hit upon a needed expansion plan.
Credit for paying before the first of the month (for example payment by the 25th). A secondary source of repayment is required prior to granting standard financing. You are staying or living in that home.

Even if you finance the receivables through internal equity, there is still an indirect cost; the opportunity cost of using that equity elsewhere which could include expanding your inventory to increase sales, reducing debt or earning interest on cash balances.
They won't be bothering you anymore. If you havent got any savings, cant get support from family or friends, or a Bank loan or mortgage, then there are your credit cards! Have a clear understanding of any existing liens and lien priority. Knowledge of credit score can help you find the best personal loan. Student Loans Debts Do Not Go On Your Credit Record. You should re-evaluate you vendors on a regular basis to make sure you are getting the best value.