How financial planning software is helping students pay off their loans
With A-level results already in and parents beginning to pack their children off to universities across the UK, it is time to assess the issue of student loans and how your offspring are going to pay them back
It may not have occurred to you to approach your financial advisor or suggest that the new undergraduate talk to one, but new Fintech advances make it an attractive option.
University fees in the UK have long been making headlines, and the idea that your children may be burdened with debt is one that might keep you awake at night.
The emergence of financial advisor software such as that provided at
https://www.intelliflo.com/ has revolutionised the investment and debt markets and focused attention on how Fintech can impact financial planning.
There is no reason that the repayment of student loans should not be a part of that forecasting of personal finance.
To understand the basics of student loans, a visit to the government’s website is advisable.
The issue for many students is what is the most economical way to repay their debt once they enter the workplace.
Different rules apply in the UK than the US, for example, where Public Service Loan Forgiveness can benefit post-graduates.
British graduates are potentially stuck in a spiral of running the cost of their borrowing rather than paying off the debt. The former relates to 9% of everything earned over £25,000 for 30 years. This is effectively a graduate tax by any other name.
Add to this the confusion of effectively overpaying your student debt. With interest rates on the debt currently set at a controversial 6.1% for those earning over £45,000, graduates are prone to panic.
It is clear, however, that given the 30-year write-off period, many graduates will never pay back their debt.
This is where Fintech comes into play, forecasting the best way to manage repayments and the impact they have on the graduate’s financial position. Combining saving with the most cost-effective way of financing student debt is where financial planning software can come into play.
Graduates dealing with student debt and those following behind them are an underserved market as far as financial advisers are concerned. There is a potential revenue stream there, benefiting all parties, and Fintech innovations impact this.