Student loan re-payment

Guest2

Guest2

Guest2

Soldato
Joined
6 May 2009
Posts
20,369
Everyone says its better to not make additional contributions and just keep paying it out of your wage however the interest rate is 1.5% on mine at the moment.

This is the same rate as the highest % ISA savings account I have and a lot more than standard saver account and things like e-savings which is 0.25%
 
If your loan interest is higher than your savings account interest it would be better to over pay.
 
Guest2 said:
Everyone says its better to not make additional contributions and just keep paying it out of your wage however the interest rate is 1.5% on mine at the moment.

This is the same rate as the highest % ISA savings account I have and a lot more than standard saver account and things like e-savings which is 0.25%
Click to expand...

Remember that ISA rates won't always be that low. Generally long term interest rates are higher than inflation.

Secondly, will you ever borrow in the future? It will be difficult to do so at anything like student loan interest rates.

Thirdly, if there is anything left after 25 years it is written off.
 
Just let it come out in deductions, don't bother unless you are minted and can't stand seeing it there, i t has not phased me one bit over the years, andi have around 2k left, so I will just let it do its thing and not spend money on it which could be better used elsewhere

One thing I do regret is not taking full amounts and doing something sensible with it, like an isa account
 
Last edited:
It's the cheapest debt you'll ever have so it's worth keeping the lump sum to go towards things like future mortgage deposits where it will reduce debt which will be much more expensive.
 
Reading this is very interesting. People mentioning to ask for full amount and save it and that's exactly what I am doing now. I have managed to save all the years into my isa account and currently am working in order to pay for my study abroad next year in order to survive and not touch my loans and grants. I should graduate with 20k+ and hopefully add that to a deposit to a house or something !
 
Bump. Finally coming to the end of my loan repayment term and I've called them up to issue a stop order to tell my employers to stop deducting student loans from my salary, and instead to complete my repayments by direct debit \0/. Even though it's a cheap debt, it'll be nice to be several hundred pounds better off each month.

Boggles the mind that HMRC only tell SLC what you've repaid at the end of every tax year! I'm sure there's a great reason :S.

Apparently switching to direct debit guarantees that you won't over pay on the loan...don't forget to do this towards the end of the loan term graduates, or you'll be hundreds of pounds out of pocket until you get the overpayment back from HMRC at the end of the tax year.
 
Participant said:
Bump. Finally coming to the end of my loan repayment term and I've called them up to issue a stop order to tell my employers to stop deducting student loans from my salary, and instead to complete my repayments by direct debit \0/. Even though it's a cheap debt, it'll be nice to be several hundred pounds better off each month.

Boggles the mind that HMRC only tell SLC what you've repaid at the end of every tax year! I'm sure there's a great reason :S.

Apparently switching to direct debit guarantees that you won't over pay on the loan...don't forget to do this towards the end of the loan term graduates, or you'll be hundreds of pounds out of pocket until you get the overpayment back from HMRC at the end of the tax year.
Click to expand...

What number did you phone?
And was it painless, got ~500 left was hopping to pay it off in one go, but had a crap month last month. So might be better just stopping it and paying DD.
 
Guest2 said:
Everyone says its better to not make additional contributions and just keep paying it out of your wage however the interest rate is 1.5% on mine at the moment.

This is the same rate as the highest % ISA savings account I have and a lot more than standard saver account and things like e-savings which is 0.25%
Click to expand...

It used to be better, then interest rates dive bombed.

Hence I just paid off all my loan with my savings.



The loan is only worth keeping (if you have the option of paying it off) if you need the low cost loan for anything else. It is damn site cheaper than credit cards, car loans, mortgages.
 
Matthew.M said:
It's the cheapest debt you'll ever have so it's worth keeping the lump sum to go towards things like future mortgage deposits where it will reduce debt which will be much more expensive.
Click to expand...

Thing is if a mortgage is not on the horizon then it doesn't help.

and actually when you apply for a mortgage you need to declare all outstanding loans, including your student loan, and these loan amounts will be removed from your mortgage so unless you lie and cheat it doesn't actually help you there.
Does help pay off credit card bills or other loans though.
 
Saving is so bad at the moment.
I paid it all off in one go, glad to be rid of it.

I'd probably advise you to put your money towards a house deposit instead - if it's a choice.
 
Glaucus said:
What number did you phone?
And was it painless, got ~500 left was hopping to pay it off in one go, but had a crap month last month. So might be better just stopping it and paying DD.
Click to expand...

0300 100 0611 and go through the options. Bit of a queue but they're open until 8 and the agent was very helpful and useful.

With £500 left I'd be stopping it left right and centre! Depending on how much you're repaying of course.
 
Participant said:
0300 100 0611 and go through the options. Bit of a queue but they're open until 8 and the agent was very helpful and useful.

With £500 left I'd be stopping it left right and centre! Depending on how much you're repaying of course.
Click to expand...

will have to get on it tomorrow. About 3.5months left I imagine, depending on overtime etc.
 
I found SLC useless when it came to the end of the loan, even after HMRC had notified them what I had paid.
Think I ended up overpaying by around £2.2K, which I had to claim back afterwards.
 
Guest2 said:
Everyone says its better to not make additional contributions and just keep paying it out of your wage however the interest rate is 1.5% on mine at the moment.

This is the same rate as the highest % ISA savings account I have and a lot more than standard saver account and things like e-savings which is 0.25%
Click to expand...

Investments produce far greater income than that, move your money there.
 
Guest2 said:
That wasn't a question either...


Better to make additional contributions or not?
Click to expand...

Yes, pay more if you can. When I left uni in 2000, I had a little over £8,000 to pay back.

I started paying them back in 2003, and continued to pay back the minimum only, which varied greatly depending on how much I got paid in any given month (for example if I had a good month with overtime they would take a shed load more).

I only finished paying them back in 2012!

You may not realise it but they have been charging you interest since the date of your first loan installment. If you have done a 3-4 year degree that interest will be piled on top, and if you have deferred, they will keep piling the interest on. Not so bad if you only owe a few grand. But if you owe £25k, you basically won't ever pay it back on minimum payments.

I would advise that you get it paid back ASAP or you will be paying through the nose in the long run. If that does not bother you, then just pay the minimum, but be prepared to have it taken out of your wages for many, many years if you owe a lot of money.

If I had my time again I would get rid of it ASAP because it took 9 years and that extra bit of disposable income was sorely needed at times.

I shudder to think the total money those with 20k, 30k, 40k, 50k etc student loans will have to pay back and how long it will take them!

For those close to paying off their loans, make sure you get the SLC to issue a stop notice to HMRC as soon as you have cleared the balance as they won't do this automatically and will keep taking your money. You do eventually get it back, but its better to avoid if you can.
 
You must log in or register to reply here.
Back
Top Bottom