Personal loans a grave concern for students, says Credit Action

Thu, 20 Aug 2009

Zero per cent credit taken out by students to fund their way through university may help them believe that going into debt is ok, encouraging them to take up more expensive options such as personal loans .

According to Credit Action, the difference between a student and a personal loan should be better clarified to those attending university in order to help them avoid getting into real debt problems later in life.

It said that while the level of debt taken on by students after three years of higher education is manageable and is not "a problem", people don't fully understand the difference between that and personal loans with high rates of interest .

Chris Tapp, director of Credit Action, said: "[Explaining] the way the student loan works and the more general financial education that we would have liked to have seen accompany the student loan, I don't think that's been done as effectively as it could have been by the government and others."

Writing for the Independent, finance journalist Victoria Bischoff recently recommended shopping around to find the best deal on a personal loan and looking past the headline rate.
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