Wednesday, January 23, 2008

Student loan to be put on credit file

First time buyers could be turned down for mortgages due to student loans

The online mortgage company mform.co.uk warns that changes to credit checks carried out by mortgage lenders will mean that more first time buyers will be turned down for loans. Later this year, information relating to student loans will be incorporated into people's credit files. This means that missed payments to the student loan company will show up as a black mark on credit ratings. The average age of a first-time buyer is 29, and many of them will have student debts.

Posted by converted lurker @ 11:52 AM (1346 views)
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10 thoughts on “Student loan to be put on credit file

  • IMHO, this is just another way to charge a higher rate of interest to borrowers. Expect lenders to be fastidiously selective of those remortgaging at bottom rates. In other words, its just another way to make money after all the cash that’s being lost these days.

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  • planning4acrash says:

    Student loans are now seen as part of credit risk, with lenders now aware that the government has no problem with doubling rates this year from 2.4% to 4.8%. With inflation on the rise, will rates be 5-6% next year?

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  • C'mon Correction says:

    Student loans have to be taken into account, students have to pay them back when they earn a certain wage which in most cases will happen within the 25 mortgage.

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  • Erm, how can you “miss” a student loan payment when it’s automatically deducted from your pay?

    Payments are made automatically unless you’re earning below the earnings threshold (about £15k I think). So the only way you can miss a payment is to not earn enough in a given month… so are mform.co.uk saying that you’ll get a black mark on your credit rating for not earning enough?

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  • It is not really surprising that the banks want all debt to be reviewed, we really need to look at the cause – since this borrow and spend Labour government introduced uni fees they have immersed our younger generation into a culture of more and more debt – it has forever been the Labour way……..c.35% of the great British public seem to agree.

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  • it might make students think about debt….

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  • I think students think a whole lot about debt; it’s the only way most of them can survive, now the grant’s gone. If the govt wanted them to stay out of debt then making it harder to pay back is not exactly going to help…

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  • @Mark

    I hope so, but what about those who have already missed a payment. It’s a bit hard on them when a new rule is introduced without warning.

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  • I have a student loan and I don’t understand how you can miss a payment. The inland revenue take it direct at source like a tax. If you move job, it usually takes thea few months to catch up so you don’t pay. Are we talking about student loans from the SLC here, or are we talking about ordinary loans from high street banks?

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  • Many student borrowers did not understand what they were doing when they signed on the dotted line for debt.
    Many mature borrowers did not understand what they were doing when they signed on the dotted line for debt.

    Now some have got into problems and the lenders have lost money. This has made the lenders question the value of those signitures on those dotted lines. Did these people know what they were signing?

    Problem is that our whole credit system is based on promises (as it always was), now credit consumers are saying they didnt understand what they promised. I think this continues to guarantee the continuing credit crunch!

    It only plays out when people stand by their debts. How long will that be?

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