What should I do if I can't afford to repay my student loan?

Understanding Your Repayment Plan

If you are struggling to manage your student loan repayments, it's essential to first understand your repayment plan. UK student loans are typically repaid through your salary once you earn over a certain threshold.

The repayment is usually a fixed percentage of your income above the threshold. Familiarise yourself with your loan type and specific repayment conditions to see where adjustments can be made.

Contact Your Loan Servicer

Once you realise you can't keep up with repayments, contact your loan servicer as soon as possible. They can offer various forms of assistance based on your circumstances.

Loan servicers can also provide detailed information about deferment or income-driven repayment plans that might lower your current monthly payments.

Explore Income-Driven Repayment Plans

If you are facing financial difficulty, switching to an income-driven repayment plan can be helpful. This adjusts your monthly payments according to your current income.

While this might extend the repayment period, it provides immediate relief and could prevent defaulting on payments. Discuss this option with your loan provider to see if you qualify.

Look Into Deferment and Forbearance

Deferment and forbearance offer temporary relief if you are experiencing a short-term financial setback. These options temporarily suspend or reduce payments without impacting your credit score.

Eligibility for these options varies, and interest may still accrue on your loan during this period. It's crucial to understand the long-term implications before pursuing this route.

Seek Professional Financial Advice

Accessing free, professional financial advice can provide strategies and insights tailored to your situation. Organisations like Citizen's Advice have expert advisors available to assist.

They can offer guidance on budgeting, debt management, and other financial strategies to help manage your repayments effectively.

Consider Additional Income Sources

Another approach to managing your loan repayments could involve boosting your income. This might include taking on a part-time job or freelance work alongside your main employment.

While not always feasible, even a modest increase in income can provide extra cash to ease loan repayments and cover essential expenses.

Budget and Prioritise Your Expenses

Reviewing your personal budget can identify areas to cut costs, focusing available resources on essential expenses like loan repayments. Use budgeting tools and apps to track spending habits.

By prioritising your expenses, you may find ways to save more effectively, helping ease financial pressure without compromising your well-being.