Did you know if you don’t earn over £21,000 in the 30 years after you graduate you don’t need to pay a penny off your student loan, no matter how much you owe?

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Short term loans for students are there to help students pay for tuition fees, study books and living expenses. They are different from other loans as their interest rates are usually dramatically less than other loans.

Currently the threshold for student loans is £21,000. This means if you earn less than £21,000 after you graduate, you do not need to repay back anything on your student loan.

However once you start earning over this amount you are required to pay back 9% of any income you earn over this figure. This means if you earn £25,000 in a year, this is £4000 over the threshold. 9% of £4000 is £360 to repay that year.

If you earn £32,000 in a year, you are earning £11,000 over the threshold and so would be required to pay back £990 that year. Do remember however until you are earning £21,000 and over you are not required to make any repayments.

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If you do earn more than this, your payment will be taken out of your salary on a monthly basis to make repaying slightly easier to budget.

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Even once you are earning over this threshold the likelihood of paying the full amount of your debt off within 30 years after you graduate is very slim, but again in depends on how much you have borrowed and how much your potential earnings will be in the future.

Another key fact is that a student loan does not appear on your credit file. If you graduated after 1997 your student loan will not appear on your credit history.

This means no matter the amount you are required to pay back, it will have no affect on your future borrowings, for the likes of a mortgage, as it will not affect your credit score.

However if you did graduate between 1990- 1997, then your student loan will appear on your credit file and it will have an effect on future borrowings and so make sure you keep up with repayments or it might have a detrimental effect on your credit history.

Unlike some other loans there is no penalty in clearing the debt early. It may be worth looking into whether it would be worth paying off early depending on how much you owe and how much your future earnings are likely to be.

Student loans are great for getting yourself through education, so no matter how much you owe you may never be in the position to repay it all back with Student Loan Repayment.

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