Student Loans, and paying them off early?

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Just wondering if anyone had any experience of this.

After being told back at the end of school that taking a student loan would cost you £2.50 a week, I've been suffering a couple of years of £120-£200 deductions from my monthly pay packet.

Spoke to them on the phone today, and it appears that if I pay them £500, thats the loan done and finished. With the 4.8% interest now on the loan, would it be better to simply pay it off? Anyone done this in the past?
 
I know you can pay it off early but for lump sums they normally add an administration fee. A friend was told she couldn't pay £2k off without a hefty penalty (a couple of hundred quid if I remember rightly).

For £500, i'd get it done and dusted.
 
I think if you pay it of in a lump sum they can stop your payments. If you leave it though. They wont stop your payments till the end iof the tax year, as they have no idea how much you owe or have paid. But you will then get a rebate. I would pay it of.
 
it may give him 5.25%. but he'll be taxed on it.. @20% so about 4.15%....

just pay it off(if you have the money) and forget about it . or gloat to your mates that your good with money for finishing it early.


I havent had a student loan debt for some years but I did pay mine off early and wasnt penalized for it....

bullit
 
Havn't there been loads of issues with people paying off the last £2-3k and then having the government keep taking money off them?
 
I paid £800 to pay off my student loan early back in December.

6 months later they're still taking money from my paycheck every month and they now owe me over £1,500.
Every time I call them they say they're sending the stop notification and yet it's never received.
Long story short, it's not worth it!
 
bullit in head said:
it may give him 5.25%. but he'll be taxed on it.. @20% so about 4.15%....
Click to expand...
Not on an ISA, you won't be.

In the end, if there's that little left, it doesn't matter what the OP does. But I like the ISA suggestion because, even if it doesn't really end up making a huge amount of difference in terms of the difference between the interest on the loan and interest earned on the savings, it's a good incentive to start saving into an ISA. Which long term is very valuable.
 
bullit in head said:
it may give him 5.25%. but he'll be taxed on it.. @20% so about 4.15%....

just pay it off(if you have the money) and forget about it . or gloat to your mates that your good with money for finishing it early.


I havent had a student loan debt for some years but I did pay mine off early and wasnt penalized for it....

bullit
Click to expand...

Paying it off early is not being good with money at all. You could have saved hundreds of pounds over the years if you had put the money in an ISA and paid off the minimum. Interest rates on the loan used to be around 2% (inflation) a few years back and ISA usually give 5%+. Student loans do not affect the ability to obtain other loans or credit rating.

I had enough not to take loans for uni but did anyway and put all of it in an ISA which is now big enough to get me substancial interest every year. It's only since SLC changed their interest rates to the higher rate of inflation 2 years ago that the benefit is smaller.
 
bullit in head said:
it may give him 5.25%. but he'll be taxed on it.. @20% so about 4.15%....

just pay it off(if you have the money) and forget about it . or gloat to your mates that your good with money for finishing it early.


I havent had a student loan debt for some years but I did pay mine off early and wasnt penalized for it....

bullit
Click to expand...
Taxed on interest earned in an ISA? What?
 
DB_SamX said:
It's only since SLC changed their interest rates to the higher rate of inflation 2 years ago that the benefit is smaller.
Click to expand...

and because it takes so long to pay back if you have used them, costs you far more than even a bank loan.

I would much rather pay it back early than lose a substantial amount of my paypacket every month.
 
Haircut said:
I paid £800 to pay off my student loan early back in December.

6 months later they're still taking money from my paycheck every month and they now owe me over £1,500.
Every time I call them they say they're sending the stop notification and yet it's never received.
Long story short, it's not worth it!
Click to expand...

Thats quite worrying... is this a common issue?
 
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