Parents and students considering loans for university

Many of the UK’s parents have admitted that their children will need to take out a student loan before going to university.

According to research from Halifax, 57 per cent of parents admit their offspring either has a student loan already or is planning on arranging one.

What’s more, 11 per cent of respondents said that they were thinking about taking out a personal loan in order to help cover costs, while 63 per cent will use their own earnings and 59 per cent will draw on savings.

“For most parents, taking your child to university for the first time is a proud but emotional moment,” said Neil Chandler from Halifax. “It is important to consider how best to support your child with the minimal amount of strain on your pocket as this commitment is likely to last for several years.”

The study found that 96 per cent of East Anglian parents would forgo home improvement plans to finance a child’s further education and 79 per cent of those in Wales would give up a holiday.

A recent report from Moneyfacts warned students over the often high interest rates applied to credit card deals available to them – which can be as much as 20 per cent typical APR.

Tags: cent typical apr, Unsecured debt, home improvement, personal loan, students considering loans, further education

Online loans ‘fuelling credit refusals’

The number of people being refused credit for a personal loan has surged to 1.4 million – with the use of online loan sites fuelling the total, according to a new report.

Research by an independent financial comparison website found that the number of applications being turned down for personal loans could be boosted by the availability of online loan deals, which rely on electronic forms to check credit ratings.

The site found that, of the 89 possible personal loans available on the market, 31 could be accessed online.

And experts have moved to point out to people seeking a personal loan that while an instant deal online can be attractive, it can also provide an instant rejection – something that will affect future credit ratings.

Sean Gardner, chief executive of the site behind the research, warned: “Loan providers are getting tough so applicants shouldn’t assume that, just because the loan is available online, acceptance is automatic.

“The same rigorous rules apply however you request credit and if you’re rejected too often it’ll be your credit rating that suffers.”

Ways of getting round this include using an online credit profiling tool, which could give an indication of whether a loan offer could be accepted, without the risk of being rejected.

Tags: rejection, chief executive, credit rating, use, finance, credit, electronic forms, personal loan