Jane needs £20,000 of funding to complete the final year of her MBA, which she graduates from in late 2020.
She accepts an offer through StepEx, receiving £20,000 in return for 7.4% of her gross income over 5 years.
Jane begins her first job after graduating on Jan. 1st, 2021, and she begins to share her income as shown in the table below.
|Repayments @ 7.4% share of income||£4,460||£4,830||£5,200||£5,580||£5,950|
NB: Numerical data has been rounded for simplicity. For a more detailed breakdown of repayments and reporting, see the full example
Total Received £20,000, Total Repayed £26,026, Representative APR 9.0% (variable).
This product does not have a fixed APR. Instead both repayments and the total amount to be repaid is linked to the amount of income earned. This means that if you earn more than StepEx estimated, your APR will be higher, and if you earn less than estimated your APR will be lower. The table below shows the probability that the APR a representative borrower would actually repay is double, or half the representative average APR.
|Less than half (4.5%) of the stated APR||14.9%|
|Less than stated APR||51.0%|
|Greater than twice (18%) the stated APR||10.6%|
Based off a representative example of Postgraduate Certificate in Education (PGCE) graduates from a range of UK universities, drawing on data from 2006 to 2016. For graduates of different degrees, these values may be higher or lower. The maximum you could repay is 5 times the amount of credit initially borrowed.
You won’t be required to make any repayments whilst your annual income is less than £21,000.
For most people, this means they won't need to make any repayments during the standard study period and that repayments will not start until they get a job.
This also gives you peace of mind that if your annual income falls below £21,000 you will not be required to make repayments during that period (other than nominal 50p charges). However, because the term of a StepEx loan is linked to the number of repayments you make rather than a fixed period of time (unlike a typical unsecured personal loan which is likely to have a fixed term – for example, 5 years) the term of your loan will be longer as a result of any periods during which you do not make repayments. For example, if you earn above the threshold for the first 12 months after graduation, but then your gross income falls below £21,000, your payments will not resume (other than 50p charges) until your gross income is above £21,000 again, in total you will still make 60 monthly payments, as missed payments will be deferred.
Repayments will be required monthly during periods when your annual income is above the £21,000 threshold and are based on self-estimated income reports you will be required to verify through submission of your P60 / annual tax return.
The amount you repay is based on the income you earn. If you earn less than expected, the total you repay will be less, conversely if you earn more than expected you will repay more.
StepEx gives ambitious students a chance to pursue higher education. There are some criteria that apply to borrowers looking to gain funds through our platform.