Student loan has become one of the commonly obtained loans these days. Most of the people especially High school graduate avail a student loan in order to continue their higher studies in the universities. Most of the banks in the country and some government agencies are responsible for lending loans in the UK. Based on their previous marks and their current performance the loan has been granted to the students as a form of encouragement to make them continue their studies and increase their qualification. The government believes that increasing the educational qualification and the lifestyle of the future generation will increase the economy of the country automatically since most of these graduates have the chance of becoming the future entrepreneurs of the country. But due to certain problems, there is a heavy danger in obtaining loans in the future.
If the problems are not solved and may exist in the future, then the only available option for the students to continue their higher education is by approaching the installment loans for bad credit direct lenders only. Due to the existing economic conditions, there is a higher chance that the government would try to make cuts in such student loans. Even though these payday installment loans will allow the student to have a brief. It would be difficult for the students to repay the amount, due to higher interest rates and continuous repayment despite it being an installment loan. One of the major reasons for the difficulty of repaying the loan is because the students wouldn’t be able to hold on to a job and study at the same time. These installment loans are more suitable for working people or for people who are trying to set up work for themselves in which case they can repay the installments regularly without any form of delay.
The economic condition of the UK
Recently it has been found that most of the people who had taken student loans have failed to repay them for a long period to the banks. This failure in collecting back the student loans, which is nearly 12 billion Pounds, has the power to cause an economic breakdown in the country along with various other loans that have not been repaid by the corporate companies, which are nearly four trillion pounds. Without the repayment of these amounts, the UK would be facing a serious economic disruption similar to the one that happened in 2008.
Also, due to the delayed repayment of these loan takers, there is a chance where nearly half of the loan taken by the students would be wiped at the end of the 30-year period. Due to this, most of the loans would not be repaid leading to a financial breakdown.
Effects of this problem
It has been revealed by the Guardian that a number of graduates are failing to repay the loan and hence the amount in the treasury has been gradually decreasing. If this continues, it might lead to a situation where there would be an increase in the fee structure along with the reduction in the number of loans that are being provided to the students.
Many of the university specialists after hearing about the existing economic conditions are hoping that the government will take necessary actions to improve the condition of the economy to prevent the budget cuts in student loan especially when a number of students are entering the university these days in the hopes of completing their higher education.
Uses of Installment Loans
Due to the problem of severe economic downfall along with the Brexit deal, the UK has been under severe financial crisis for the past few years. Due to the exceeding amount of rejections provided by the bank, most of the people are preparing to get 12 Month loans from direct lenders rather than getting a direct bank loan, which is very complicated. These loans besides having a high rate of interest, they are most convenient and suitable for people who are in emergency situations. These loans are safe to obtain and they do not have any form of extra payments or dangers associated with them.
The main aim of these private loan lenders is to provide financial support to the people by providing instant loans. The loan lenders have also recently introduced emergency loans to facilitate the requirements of various peoples including students. Anyone above 18 years of age can obtain these loans and they also should be a citizen of the country.
Action was taken by the government
The government, in order to face the situation, has increased the rate of the repayment making the students repay nearly double the amount. Many financial advisors and students are against this act of repayment. According to this method, the students are required to pay nearly 9 percent of the loans that are taken after 2012 and they have to pay the remaining loan for 30 years until the slate will be wiped off.
Most of the financial advisors and the university people are hoping that the government would make a perfect decision to prevent the increase in the interest rate of the student loan and at the same time ensure the repayment of these loans from the students.
