How does Future Finance make student loan decisions?
At Future Finance, we know there's a lot more to you than just your credit score, especially for young students who haven’t had the chance to develop a financial history. By attending university, you're improving your future earning potential and that's why we look at lots of different factors when assessing your student loans application.
For a number of reasons, some students unfortunately leave university before completing their course, especially in their first year of studies. If the course that you're undertaking has a high dropout rate in its first year, this will mean that your course will be assigned a low continuation rate and you may not be approved a Future Finance loan on this basis.
We realise that if you're borrowing in order to study, you're serious about your course and your education. Therefore, once you complete your first year of studies, you won’t be denied a loan on the basis of the continuation rate of your course.
An employment rate is based on the number of graduates from a particular course that are employed. As you can imagine, some courses that are considered especially difficult or prestigious have a better employment rate than others. Some courses, such as nursing, or accountancy have a better employment rate than some other courses, such as music. A decision is not made on the subject type, though, but rather on the specific course at the individual university; there are, for example, highly regarded music courses in the UK with high employment rates.
Predicted future affordability
Looking at your financial history, your likelihood of employment and what your future income might be (based on the course you are studying), we calculate how likely you will be able to afford the repayments on your Future Finance loan after you graduate. We don’t want to make loans to students who will struggle to repay and find themselves in financial difficulty later on.
Like other lenders, we do also take the following into account:
Your credit score is a number that lenders use to determine your ability to repay a loan based on previous financial information. A credit score is ultimately based on a credit history, but because it is just a number, a credit score can’t provide a context; this is what the credit history is used for.
A credit history is slightly different to a credit score. Your credit history can help understand how that number was made. For example: your low credit score may be because you haven’t taken advantage of a lending facility to date and you have only turned 18 years of age, or it could be because even though you do have a history of making regular payments, you're also 10 months in default on a car loan.
So it's important to look at the reasons why a credit score is low, in order to assess people who might otherwise have been rejected.
A guarantor is someone who agrees to repay your loan if you are unable to make repayments on your loan. A guarantee is a form of security for the loan. Many students who apply to Future Finance for a student loan will be required to provide a guarantor as they will not have had the opportunity to develop a sufficient credit history in order to qualify for a non-guaranteed loan.
Legally, you have to be at least 18 years of age in order for us to fund a loan to you.
Find out more
How our student loans work: See how much you could borrow – without it affecting your credit score – and find out how our flexible repayments work.
Guide to government student loans: Read our simple guide to the different types of government student loans you might be able to get.
What it means to be a guarantor: Find out who can act as guarantor on your student loan and what it entails for them.