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Budgeting for Student Loans

How to model out student loan repayments

University is a time for academics, fun, personal growth… and student loans.

If you have outstanding debt from your university education, you’re not alone. 14% of adults have student loan debt. With the price of university increasing, and jobs increasing bachelor’s degree requirements, it’s unlikely that the student debt crisis will disappear.

Whether you’re a business owner, a recent postgraduate, or a current student, the options for student debt repayment may seem daunting.

Planning for the future means predicting the future. Casual’s adjustable templates will offer you a range of possibilities to account for every scenario.

The Best Way to Pay off Student Loan Debt

When determining how to pay off loans, you may want to look into the following:

  • What is the lowest total sum of money I can pay?
  • When is the soonest I can pay off my debt?
  • What is the highest payment I can make per month while still budgeting effectively for other expenditures? Most countries don’t financially penalize extra repayments, however they are not refundable, so it is essential that a month is well budgeted before determining if this is feasible.

Finding the answers to these questions require calculations based on several different factors.

How Repayments Work in the UK

In the UK, when you begin repaying is based on a threshold determined by which plan you’re on. To determine which plan you are on, visit the UK student loan website. Based on your plan, you pay either 9% or 6% of what you make over the predetermined threshold.

For example, if your threshold is £1,657, and you made £3,000 this month, your amount over the threshold is £1,343. If you’re on plan one, you will pay 9% of £1,343. Therefore, your monthly repayment would be £120.87. Your income fluctuates, which makes predicting monthly payments difficult. That’s where Causal comes in.

Determine the Basics, and We’ll Do the Rest

Student loans– just like running a successful business– requires a budget. Casual’s student loan repayment template is an example of how a student can use casuals' clear and practical modeling tools for financial planning.

All you need to do is:

  • Determine your current income. This is dependent on your salary or predicted salary.
  • Determine your initial loan balance.
  • Determine your expected salary growth per year.

With this information, you can create adjustable models that will help you plan for each step of the repayment process.

Have a look at our template below, which lets you customise the assumptions on the top of the screen. If you'd like to further customise the model, you can click use this template in the top right to make further adjustments.

To Repay Early or Not to Repay Early

If you find yourself with extra cash, you may wonder if it’s beneficial to make a lump sum early repayment.

Causal can map both scenarios:

  1. You make no early repayment
  2. You make a lump sum early repayment of £10k in year 1.

Causal’s interactive and clear graphics will map out when you’d be done with payments in each option and what your loan balance would amount to during different periods taking into account your fluctuation salary, inflation rates, and interest rates.

We know that life is unpredictable. Our templates allow for uncertainty, giving you a range rather than a set number.

In many scenarios, making an early repayment can save thousands of dollars. The question is whether you can afford this in your current budget.

We’ll calculate the potential savings so that you can determine your repayment plan.


After determining the best course of action for your loan repayments, you can budget.

The categories of a monthly budget are:

  • Needs
  • Wants
  • Savings

Your needs can include rent, food, bills, student loan repayments, dependents, and other mandatory expenditures.

Your wants may include clothes, entertainment, a subscription, or anything that isn’t necessary.

Your savings are what’s leftover. Many people follow the 50/30/20 rule. 50% of your income goes to needs, 30% goes to wants, and 20% goes to savings.

Let’s calculate this using the numbers we determined through the causal student loan repayment template.

In the £3000 a month scenario, your needs budget is £1500. Your monthly student loan repayment is around £120, which leaves you with £1,380 for the rest of your needs. £900 would go to wants, and £600 would go into savings,

You can use Causal’s personal investment template to determine how much your £600 investment will grow over a specific period.

Why Personal Finance Budgeting is Essential to Any Startup

Personal finance budgets are essential to anyone looking to start a business.

What seemed like a large sum of money quickly dwindled when all of the needs were paid. A startup costs money. In 2018, Entrepreneurs started 77% of small businesses with personal funds.

If you’re looking to start a business or invest personal funds into your business, it’s essential to map out existing expenditures. Causal looks into the future, so you know the right time to start your business and how much cash you need.

Causal for Personal Finance and Budgeting

Causal is a powerful business tool, but it can also be used to manage personal finances.

Our community-built templates offer starting points for personal financial management, including debt repayments, savings growth predictions, and asset allocation.

Even if you’re not in college, Causal University will offer step-by-step explanations of how to use the wide range of tools we offer. Just enter the variables, and we’ll do the rest of the work for you.

Budgeting for student loans doesn’t have to be complicated. Our tools will look into the future, so you can plan for your future.

Build your own financial models for free

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