Can You Get a Payday Loan if You Already Have a Student Loan?

There are a number of long-term implications that come with the decision to progress into higher education. Of course the vast majority of these are positive, not least the ability to get into your preferred career and potentially receiving an increased salary as a direct consequence.

However the one obvious downside, which is likely to haunt you for many years, is the dark cloud of a student loan looming over you. Building up such a huge debt (most loans are in the tens of thousands of pounds) at such a young age can be daunting and, as we've mentioned, will have an ongoing effect on your future finances. Unfortunately this is all part of the process of deciding whether or not to go to university.

The good news though is that a student loan should never directly impact any other form of borrowing that you look to undertake in future life. Unlike other forms of debt there is no rigid repayment structure and is instead treated more as a tax. Therefore even if you are still £15,000 in debt to the student loan company, this won't stand in your way of getting a payday loan, mortgage or credit card.

Other forms of credit can of course impact your credit history. So if you already have a personal loan, this could impact your ability to secure further finance elsewhere. This is simply because lenders need to be sure that you have a manageable debt and aren't likely to default at any stage. The more repayments you have going out, or issues within your history, the higher your potential risk.

When it comes to a student loan, there are no repayment risks. Whilst you can't ask your bank to put your payments on hold if you lose a job or are temporarily short of funds, your student loan will always reflect the amount you receive in your pay packet. Therefore it doesn't pose the same level of risk and most lenders will happily overlook your outstanding debt.

Of course it would be hugely restrictive and unfair if former students were to be penalised for having an outstanding balance on their educational borrowing. Apart from anything, it would severely impact first time buyers, as many would struggle to get mortgages based on the huge debt that can last for decades after you graduate. Therefore this simply wouldn't be practical or ethical, therefore most won't use it in any regard.

So there's no reason to avoid university and the potential debts that it may bring on the basis of your ability to secure finance in the future. Of course you should always look to be sensible with any money in your possession (whether as a student or in later life) and avoid racking up avoidable overdraughts and credit card bills along the way, as this can have a more long-term impact.

In the past I've covered the benefits of effective budgeting and how to deal with a personal financial crisis; however in this case the tone is less about warning against actions that could impact your finances and leaning more towards reassurance. Debt is an inevitable consequence of attending university. We have all come to accept this, including lenders, therefore a student loan won't make the slightest difference to your chances of getting finance in later life.

Vincent Rogers is a finance writer who writes for a number of UK companies. For online payday loans, he recommends Paydaypower.co.uk.