Key factors when comparing student loans
A lower monthly payment does not always mean a cheaper loan; longer repayment tenures reduce monthly payments but increase total interest significantly. Comparing APR, origination fees, and total repayment across loan offers is critical.
Worked example
Loan A offers £25,000 at 8.5% over 10 years (monthly payment £310.01, total cost £37,201).
Loan B offers £25,000 at 7.9% over 10 years (monthly payment £302.04, total cost £36,245).
Choosing Loan B saves £7.97 per month and £956 in total interest over the life of the loan.
Inputs for loan comparison
01
Loan A & Loan B amount
The borrowing amount for each loan offer.
02
Interest rates
The annual percentage rate for each lender.
03
Tenure
Repayment term in years.
CALCULATOR QUESTIONS
Education loan comparison tool questions
Should I choose a fixed or variable interest rate?
Fixed rates provide predictable monthly payments, while variable rates may start lower but can rise over time.