eCAF Financial Literacy Video (short version) 2016

♪(Music Playing)♪ A HELP loan is
a student loan and is very different
to a loan from a bank. Unlike a bank loan, you
are only required to pay back your HELP loan
once your income reaches a certain amount or
threshold known as the Compulsory
Repayment Threshold. Once your income reaches
that level, you need to start paying off your HELP loan
even if you're still studying. It's important to know
that you will still have a HELP debt even if you
don't complete your study. When you are repaying a
HELP loan, the rate you have to pay will depend
on how much you earn, and varies from 4% to
8% of your income. The Australian Tax Office
or ATO will calculate your repayments based
on your income. Before you access a
HELP loan, make sure you understand your obligations
around repaying the loan and stay informed about any
changes to the HELP scheme and how they could
affect your repayments. I chose to take out a HELP
loan to pay my tuition fees because I wasn't in a
position to pay for my studies upfront, and
neither were my parents. When I finish studying
this year, I will have a $20,000 HELP debt. Here is what my HELP loan
repayments might look like. If I work full time and earn
a salary of $56,000 a year, 4% of my
pay would go towards repaying my HELP loan, and
this is taken out of my pay along with regular
tax payments. This means that I would be
making repayments of $2,240 a year towards my HELP debt,
which is about $86 a fortnight. I know that when my salary
increases so will my HELP debt repayments. Each year my HELP debt will
increase because of indexation, which reflects increases
in the cost of living. If I decide to take on more
debt, like buy a car, I will need to include my HELP
loan repayments in my budget. If I decide to move
overseas to work, I will still have to make
repayments to my HELP debt. A HELP loan is a great
way to pay for your study, but it is a loan, so make
sure you know what's involved.

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