Student loan interest rates

Guest2 · 24 Mar 2010 at 10:42

As of this month I have started paying back my student loan at £11 a month. I had a loan from 2003 - 2007, so 4 year of max loan + interest. Its on about 19.5k the last time I checked. I imagine this will be at 20k now

What is the standard interest rate on a student loan?

At this rate it should only take me 151.5 years to pay it off! (maybe 200 with the interest)

Rich_L · 24 Mar 2010 at 10:45

It's 0% at the moment until 31 August 2010

DB_SamX · 24 Mar 2010 at 10:47

Google: http://www.slc.co.uk/statistics/facts_figures.html

Interest Rates for Income Based Loans The Student Loans Company will apply 0% interest rate from 1 September 2009 – 31 August 2010 across the UK.
The Borrowers monthly repayments are unaffected by the rate of interest. Borrowers repay 9% of their earnings over the income threshold of £15,000.

Gaz1988 · 24 Mar 2010 at 10:48

You can make payments towards it aswell to pay it off quicker.

Guest2 · 24 Mar 2010 at 10:57

Thanks all. I did google and search and read that it said 0% but didnt believe it.

Gaz - Whats the point, might aswell put it into an ISA then pay off a fat chunk of it in x years

Skillmister · 24 Mar 2010 at 10:59

Just earn under the cutoff point for the next 50 years and get it written off

DJMK4 · 24 Mar 2010 at 11:06

Whats the point in putting everything out to pay it back, I dont intent to pay back more than what comes out my salary per month. Its only £4k I have anyway.

It will get written off at some point, I have far too many important things in my life than raping myself to pay off £4k

britboy4321 · 24 Mar 2010 at 11:09

DJMK4 said:
Whats the point in putting everything out to pay it back, I dont intent to pay back more than what comes out my salary per month. Its only £4k I have anyway.

It will get written off at some point, I have far too many important things in my life than raping myself to pay off £4k

It won't get written off unless you declare yourself bankrupt (don't go there if you ever want a mortgage/loan!) or 50 years passes without you havign the capability to pay it, or you are deemed unfit to pay (as in, go mental)

!

Chris1712 · 24 Mar 2010 at 11:16

britboy4321 said:
It won't get written off unless you declare yourself bankrupt (don't go there if you ever want a mortgage/loan!) or 50 years passes without you havign the capability to pay it, or you are deemed unfit to pay (as in, go mental)

!

25 Years from 2006 onwards BRAP BRAP BRAP!

RDM · 24 Mar 2010 at 11:18

Skillmister said:
Just earn under the cutoff point for the next 50 years and get it written off

Personally I would rather earn significantly over the cutoff instead.

iviv · 24 Mar 2010 at 11:19

Gaz1988 said:
You can make payments towards it aswell to pay it off quicker.

Why would you want to do this? Its essentially a 0% loan. Instead of paying it back, stick the money into a high interest bank account or something. You'll actually be earning money with it then. And even when the interest rate goes back up, as long as you put your extra money in account with a higher interest rate than the loan interest, you'll be earning more than if you pay it back.

semi-pro waster · 24 Mar 2010 at 11:21

Chris1712 said:
25 Years from 2006 onwards BRAP BRAP BRAP!

Which is still an awfully long time to earn less than whatever the cutoff amount is at any given time.

While I'm not convinced that student loans are a good thing in principle they aren't really worth considering for most purposes, it's almost certainly the best interest rate on any debt you'll ever get, it doesn't get included in the majority of debt calculations and you'll only start paying it off once you earn above XX amount.

Chris1712 · 24 Mar 2010 at 11:22

semi-pro waster said:
Which is still an awfully long time to earn less than whatever the cutoff amount is at any given time.

While I'm not convinced that student loans are a good thing in principle they aren't really worth considering for most purposes, it's almost certainly the best interest rate on any debt you'll ever get, it doesn't get included in the majority of debt calculations and you'll only start paying it off once you earn above XX amount.

I'm not saying it does and I have no plans to, just informing

. Its still going to take some sweet time to pay off, I think mine will be not far off 20k when I finish, maybe more

.

Interestingly, I earn over the cutoff on my current placement, but apparently that doesn't count

.

Smithy · 24 Mar 2010 at 11:24

Guest2 said:
Thanks all. I did google and search and read that it said 0% but didnt believe it.

There's no 'real' interest cost because the most you'll pay is the rate of inflation.

Paying off your student loan is illogical - a bad economy.

http://www.moneysavingexpert.com/loans/student-loans-repay#should

Stretch · 24 Mar 2010 at 11:26

Guest2 said:
Thanks all. I did google and search and read that it said 0% but didnt believe it.

Gaz - Whats the point, might aswell put it into an ISA then pay off a fat chunk of it in x years

No you wouldn't. Most ISA pay between 2-4%. Inflation (RPIX) is currently 4.2% so you're not going to make much if anything in real terms.

DJMK4 · 24 Mar 2010 at 11:45

britboy4321 said:
It won't get written off unless you declare yourself bankrupt (don't go there if you ever want a mortgage/loan!) or 50 years passes without you havign the capability to pay it, or you are deemed unfit to pay (as in, go mental)

!

Chris1712 said:
25 Years from 2006 onwards BRAP BRAP BRAP!

I started in 2006 :cool:

Guest2 · 24 Mar 2010 at 12:00

Is there a way of paying back £0 each month like I was doing? I'm not going to live till 170 so i see no point really!

apatia77 · 24 Mar 2010 at 12:06

Guest2 said:
Is there a way of paying back £0 each month like I was doing? I'm not going to live till 170 so i see no point really!

But this changes accordingly to how much you earn?

Are you saying that you want to work all your life for a minimum wage?

The more you earn the more you pay back, some people pay £100+ p/m back for their student loans.

Guest2 · 24 Mar 2010 at 12:41

apatia77 said:
But this changes accordingly to how much you earn?

Are you saying that you want to work all your life for a minimum wage?

The more you earn the more you pay back, some people pay £100+ p/m back for their student loans.

Yes it will change, no, i just think it would be more worthwhile to pay back £0 and save instead. £100 a month id still be paying back for 17 years

Jimmeh · 24 Mar 2010 at 12:43

apatia77 said:
The more you earn the more you pay back, some people pay £100+ p/m back for their student loans.

And then some!

Only about 8 months to go for me until I've payed this off. Been paying it off since 2002, with no extra payments.

It's the best debt to have in the UK... don't consider paying more off than the 9% when earning over the threshold (whatever that is nowadays).

That said, it'd be nice to have the money being taken for the SLC for disposible income! Almost an unexpected surprise given it's money I've never seen before because I've constantly been paying this off.

To the OP, you are required to pay off what you owe, as with any debt. PAYE determines that you're earning over the threshold. If you are, 9% goes to the SLC - no choice. You can't waive this, its money you owe!