Brighter And some

Student loans: does size matter when it comes to borrowing?

by Kate Watt, Marketing Manager 20 June 2024

Got a whopper of a student loan? Think it might reduce how much you can borrow?

Well you might be right, but it’s not that simple.

Student loan repayments – not the size of the student loan – are what banks are interested in when it comes to calculating your borrowing power.

Since repayment amounts depend on your income, the size of your student loan alone can’t determine your borrowing power, explains

A person earning $60,000 will pay just 1 per cent of their income on student loan repayments whereas someone earning $151,201 or more will pay 10 per cent of their income annually to repay their debt.

“You could have a $200,000 HECS debt while earning under $51,550 a year and you won’t have to make any repayments,” Mortgage Choice broker Larissa Barton told

“But if you’re on $100,000 per year, then you have pay back 6.5 per cent a year, or more than $6,000 annually, and that’s what the lender will take into account.”

Student loan holders should also check out what the hip pocket benefit might be for you after the government announced recent changes to reduce student loan debt.

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