Streamlining Student Finance: The Rise of Student Loan Apps in the UK

The Rise of Student Loan Apps in the UK

Getting an education in the UK can be an expensive endeavor. With university tuition fees averaging £9,250 per year, on top of costs for accommodation, books, and living expenses, many students turn to government student loans to help finance their degrees. However, navigating the student loan system through traditional channels can be complex and time-consuming. This is where student loan apps come in.

What are Student Loan Apps?

Student loan apps are mobile applications designed to help students manage their government-funded student finance. These apps aim to streamline the process by providing an easy way for students to:

  • Apply for student finance
  • Track loan payments
  • Manage repayments
  • Understand repayment terms
  • Access student discount schemes

By consolidating all these services into one convenient platform, student loan apps promise to save students time, hassle, and confusion when dealing with their finances.

The Rise of Student Loan Apps

While government student loans have been around for years, student loan apps are a relatively new phenomenon in the UK. They started gaining popularity in the early 2010s, with companies like Student Loans Company offering apps to help students keep on top of their accounts.

The growth of fintech and the influx of digital-first users created fertile ground for specialized student loan apps to thrive. Some of the top options today include:

  • ** Future Finance** – Offers student loans alongside its app for tracking repayments and building credit.
  • ** Prodigy Finance** – An international student loan provider with an app for applying, drawing down funds, and managing repayments.
  • ** Totum** – A discount card and app with loan tracking capabilities for UK students.

The adoption of these platforms has skyrocketed in recent years. One survey found 77% of university students use a mobile app to manage their money, with student loan apps being some of the most popular. Their growth mirrors the rise of digital banking and fintech apps aiming to improve personal finance management.

Key Features and Benefits

So what exactly do student loan apps offer that makes them valuable? Here are some of the key features and benefits driving their popularity:

  • Loan applications – Apply for student finance through the app quickly and securely.
  • Notifications and reminders – Get notified when it’s time to reapply for funding each year.
  • Loan payment tracking – View loan amounts, disbursement dates, and repayment status.
  • Repayment calculators – Estimate repayment amounts based on projected salary and chosen repayment plan.
  • Credit building – Some apps help build credit history through student loan repayments.
  • Money management – Budgeting tools and personalized money tips based on spending habits.
  • Discounts – Access student discount schemes and offers through the app.
  • Financial education – Learn about taxes, budgeting, and saving while studying.

This combination of convenience, savings, and guidance in one place simplifies student finances and gives users more control of their money.

The Impact of Student Loan Apps

Student loan apps are achieving their goal of simplifying student finance based on their popularity and user feedback. In particular, they are having an impact in three key areas:

1. Saving time

Students save significant time by having loan information and management tools in one place compared to traditional services and websites. This gives them more time to focus on their studies.

2. Reducing confusion

The apps clarify loan terms and calculations, ensuring students understand their options and obligations. This leads to better financial decisions.

3. Improving financial skills

Apps gamify budgeting, offer money tips, and build credit. This teaches students skills that benefit their finances now and after graduation.

Of course, there is still room for improvement. Some users complain that certain apps lack features or need a better interface. However, as a relatively new solution, student loan apps are still rapidly evolving.

The Future of Student Loan Apps

What does the future hold for student loan apps in the UK? Here are some possible developments:

  • More comprehensive access – Apps partner with more universities and government loan providers to reach more students.
  • Integrated repayments – Apps could take loan repayments directly from a user’s bank account.
  • Improved analytics – Advanced analytics help users understand spending habits and make recommendations.
  • More automation – Apps may integrate with other services and automate processes like credit building.
  • Open banking – Using open banking standards to connect budgeting and money management tools securely.
  • Financial advisor features – Apps could offer access to financial advisors for personalized guidance.

As technology improves and innovative new features emerge, student loan apps seem poised to become increasingly vital in managing student finances in the UK.

Conclusion

Student loan apps have rapidly grown from a niche offering to a mainstream staple for UK university students. By consolidating loan management, budgeting, financial education, and discounts into one platform, they are streamlining the student finance experience. Users benefit from greater convenience, clarity, and control over their money – key advantages when taking on the cost of higher education. While there is room for improvement as the technology matures, student loan apps look set to become a productive fixture supporting students through school and beyond.

Frequently Asked Questions About Student Loan Apps

What are the main features of student loan apps in the UK?

The main features of UK student loan apps are applying for loans, tracking payments and repayments, managing budgets, accessing discounts, and building a credit history. Some also offer financial education content.

Are student loan apps safe to use?

Student loan apps are generally safe to use as they utilize bank-level security measures like encryption, secure login, and fraud monitoring to protect user data and money. Leading apps are authorized and regulated by the Financial Conduct Authority.

How do student loan apps make money?

Some student loan apps earn commissions when users take out loans through their platforms. Others charge fees for certain premium services or generate revenue through targeted promotions and advertisements.

Do I have to use a student loan app?

No, student loan apps are optional tools. You can manage your government student finance directly through the Student Loans Company without using an app.

Can international students use student loan apps in the UK?

Some student loan apps in the UK cater specifically to international students studying there. They facilitate applying for and managing private international student loans. Public government loans are only for British students.