That historic interest rates. ie what people actually paid back between those dates.
All you are interested is in the quick facts table. your loan is 1.5% but can change.
Pay Off Student Loan?
- Thread starter RobMunfy
- Start date
That historic interest rates. ie what people actually paid back between those dates.
All you are interested is in the quick facts table. your loan is 1.5% but can change.
Man of Honour
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In a similar situation as the OP. Will just be leaving it be unless I get LOTS of money, then I would pay it off.
Associate
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I'm going to pay mine off in the next couple of years as its 140 quid a month which is quite a big chunk.
Associate
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You are, but I just want rid of mine now!
Unfortunately, that's a myth that the Government feed people. The mortgage companies do take in to account your student debt as it is something that will affect how much net income you will have and therefore, the size of the mortgage you can obtain.
yep they ask for net income, not gross.
You sir, have your head screwed on.
I had a couple of friends who were quite well off and didn't require student loans. They took them anyway purely to make interest (before everything went boobs up), like you have. Smart move. Whilst working through uni has no doubt been a pain you've given yourself a nice step up.
I think I worked out a while back that to just pay the minimal amount from my salary and save up for any annual interest payments (if these aren't added on to the due amount, can't remember) that you'd have repaid about £11k back on a £20k pa salary come 25 years so you'd be £14k better off not making any over payments. I may be wrong but I won't be contributing any more to mine than is necessary.
Associate
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at my rate it will be 2017 before my debt is paid off...
It's effect is minuscule though. On a £30k gross income that's about £6k less in total mortgage you could get assuming 4x salary is given. At that level deposit makes more of a difference.
that isn't your credit score though...
it affects your income, not your credit rating.
This tbh... it would generally be better to have a much available for a deposit as possible - generally > 25%
For the vast majority of people paying off your student loan early makes no financial sense at all.
Student loans are stupidly good value usually, usually the last debt you want to pay off after mortgage, other loans etc . It might even be better to invest money than to pay of the loan, but get finance pro to work out the best value for you.
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![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
Correct but the effect of having the value of your outstanding loan available, in cash, as a deposit will have a far more favourable effect on a mortgage application than having an extra £50-£100 a month net income.
Consider this example. You have a £15k student loan outstanding. You want to buy a £100k house.
Who gets the better mortgage?
Person A, who has just paid off his student loan, has a £15k deposit and earns £1500 net.
Person B, who was about to pay off his loan, but decided this was stupid, has a £30k deposit, and earns £1400 net.
DO NOT PAY IT OFF.
It is NEVER cheaper or better to pay it off. It is NOT conventional debt. It is not 'hanging around your neck'.
Just forget it exists, pretend the deductions are just tax, and live your life.
DO NOT PAY IT OFF.
http://www.moneysavingexpert.com/loans/student-loans-repay
A calculator at the bottom that will tell you how long you've left of repaying. Salaries under £18/19k won't clear it before the 25 years is up (based on £20k of debt and depending on your rate of interest).
I don't get the idea of 'just wanting to clear it for the sake of it'. This isn't a debt where you're going to be chased by debt collectors and bailiffs. If you earn enough to repay it then let the minimal deductions from your pay cover it. If you don't, well then you can chuckle at the balance you got away with not repaying.
A calculator at the bottom that will tell you how long you've left of repaying. Salaries under £18/19k won't clear it before the 25 years is up (based on £20k of debt and depending on your rate of interest).
I don't get the idea of 'just wanting to clear it for the sake of it'. This isn't a debt where you're going to be chased by debt collectors and bailiffs. If you earn enough to repay it then let the minimal deductions from your pay cover it. If you don't, well then you can chuckle at the balance you got away with not repaying.
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[TW]Fox;18712791 said:
This is the only sensible advice in this post.
Paying off the loan will cost you more money in the long and short term. There is also inherant value in having the spare cash - you might need it if you lose your job, need to buy a car, or want to pay a deposit on your house.
The only reason why you might want to pay it off is if you think you lack the self-discipline to save the cash. If you're going to blow the £9,000 on beer then you're better off paying off the loan.
Absolutely this - you don't just gain the difference in interest between savings and the student loan - you gain by having thousands and thousands of pounds in the bank, which you can use if you need to.
This is priceless.
Ignore your student loan.