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Graduate loans 'shouldn't fear the credit crunch'

Recent university graduates should still be in line for favourable rates on their home loans, according to a financial website.

Analysts at Moneyfacts.co.uk have suggested that, despite a recent tightening-up of the mortgage market due to the credit crunch, the ex-students have little to fear.

Mortgage lending is predicated on risk - meaning that young professionals with degrees, who are generally predicted to earn higher wages in the future, are given favourable treatment.

Samantha Owens at Moneyfacts.co.uk commented: "[Graduate loans] aren't like the standard market…[there are] different risk factors that they're looking at, because they're trying to get the graduates in, they're tying to attract them with rates that are slightly more preferential than they're going to give to other people.

"[Loan lenders may tweak the packages slightly, but there isn't a massive amount of revision with any economic changes in the market."

Figures from charity Credit Action show that the university leavers of 2007 owe an average of £12,400 on their student loans.

Overall, 54 per cent of students were found to graduate facing loan repayments of over £10,000.

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