Wednesday 10 August 2022 12:22 AM Relief for students as interest rates on loans are slashed to 6.3 per cent trends now
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Interest rates on student loans have been further reduced to 6.3 per cent to protect graduates from rising inflation.
The Department for Education said the new cap, which comes into force in the autumn, will bring the interest rate below RPI (retail price index) by the ‘largest amount on record’.
With RPI soaring, student loan borrowers were facing a 12 per cent interest rate in September until a cap of 7.3 per cent was announced in June.
Universities minister Andrea Jenkyns said the additional reduction will mean ‘no new graduate will ever again have to pay back more than they have borrowed in real terms’.
Interest rates on student loans have been further reduced to 6.3 per cent to protect graduates from rising inflation
The figures are always finalised in August, and the cap has been adjusted in line with the prevailing market rate (PMR) for comparable unsecured personal loans, which is now 6.3 per cent.
It means a borrower with a student loan balance of £45,000 will reduce their accumulating interest by around £210 per month, compared to 12 per cent interest rates.
This is on the total value of the
