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Student finance survival guide

Glossary

There is a lot of jargon used in finance and this can be confusing, the terms shown below are the words you will need to know in order to manage your finances at university.

loan

A loan, for example a student loan, is when a bank or company lends you money. You have to pay this back as well as any interest that has built up on your loan.

interest

Interest is the amount you have to pay to the bank in order to borrow money. This is worked out a a percentage of the money you borrow. However, if you save money in the bank instead of borrowing it, the bank pays you interest - great stuff! The percentage can vary and the current percentage is known as the 'interest rate.'

interest rate

The interest 'rate' is the amount of interest you have to pay on debts or will receive on savings. That is, if you borrow £100 from the bank and the interest rate is 5% per year, the next year you will owe the bank £105. But if you have £100 in a bank account which offers 5% interest for a year, the bank will give you £5. The interest you have to pay differs from bank to bank and will vary at the same bank at different times depending on the state of the economy.

bursary

Many universities now provide bursaries to students. These do not have to be paid back.

grant

The government can provide a maintenance grant and a special support grant to students. The amount you receive in grants will be based on the financial support you receive (or could receive) from your parents. Grants do not have to be paid back.

overdraft

Recommended Further Reading

An overdraft is something that banks may offer you when you open a current account. It allows you to spend more money than is in your account. For example, if you have a £200 overdraft, you can spend the money you've put into your account plus £200 of the bank's money. You will then have to pay this money back, with interest. As a student you should be able to get an interest free overdraft but you will have to start paying this back once you graduate.

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