Log on to the website, which should be updated for 2012 tax year, 2013 is unlikely to be on there yet, go to the calculator and enter your 2013 figures either from payslips or p60 end of year, then add on the first few payments from this year.
Student loan re-payment
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Log on to the website, which should be updated for 2012 tax year, 2013 is unlikely to be on there yet, go to the calculator and enter your 2013 figures either from payslips or p60 end of year, then add on the first few payments from this year.
Yeah, it disappears when you hit retirement age. Pretty disappointing if you make it through your entire career near earning enough to pay back your student loan!
Soldato
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DO NOT PAY IT OFF!
1.5% is still a low rate even in the current world of poor savings rates and even if instant access ISAs aren't good for you you can get e.g. Santander 123 current account paying 3% gross up to £20k which even for higher rate tax payers is still over 1.5% net interest. That is just a simple mainstream example - there are likely many better investment opportunities.
It is really very simple, the ONLY time you should consider overpayments on a student loan is when the interest rate is more than you will receive on investments. Student loans are 'unique' in the sense that repayments are based on earnings so unlike normal loans if you lose your job then you are not required to continue making payments. Furthermore once you pay back that money, it is gone for good, it's not like you can suddenly hit them up for another £3k when you need funds for a house, or a car, or whatever. In other words you should hold on to your student loan as long as possible until such time as the interest rate exceeds what you can get elsewhere.
1.5% is still a low rate even in the current world of poor savings rates and even if instant access ISAs aren't good for you you can get e.g. Santander 123 current account paying 3% gross up to £20k which even for higher rate tax payers is still over 1.5% net interest. That is just a simple mainstream example - there are likely many better investment opportunities.
It is really very simple, the ONLY time you should consider overpayments on a student loan is when the interest rate is more than you will receive on investments. Student loans are 'unique' in the sense that repayments are based on earnings so unlike normal loans if you lose your job then you are not required to continue making payments. Furthermore once you pay back that money, it is gone for good, it's not like you can suddenly hit them up for another £3k when you need funds for a house, or a car, or whatever. In other words you should hold on to your student loan as long as possible until such time as the interest rate exceeds what you can get elsewhere.
£500 a monthMust be on a nice salary!...
According to my calculations, a monthly £500 student loan contribution equates to a gross salary of £81,666.66 on the £15K income-contingent style loans.
500 = 0.09(x - (15000/12))
500 = 0.09(x - 1250)
500 = 0.09x - 112.5
612.5 = 0.09x
x = 612.5/0.09
x = 6805.55
Monthly salary: £6,805.55
Annual equivalent: £81,666.66
Got my 27k student loan stashed away in a few a S&S ISA that have easily outperformed the 1.5% interest that has been accruing on the loan. I could clear the debt if I wanted but it makes no sense to do so at this point in time.
It will make up the majority of my house deposit when I look to buy next year.
/Salsa
It will make up the majority of my house deposit when I look to buy next year.
/Salsa
The only reason to pay it off would be if something weird happened and it became impossible to match or better the interest rate with savings. But on the 1998-recent style loans that is very unlikely because it the rate is capped at the lower of base rate + 1% or RPI, and certainly since those loans came in to effect that has been easy to do (in simple terms there have always been some institutions offering more than 1% above base rate net).
Realistically for that to happen there would probably have to be a change in the tax thresholds such that people earning megabux starting having to pay a much higher tax rate but to be honest most of those people will have cleared their loans by then anyway, especially with the imminent hiking of the ISA threshold to £15k/year.
Realistically for that to happen there would probably have to be a change in the tax thresholds such that people earning megabux starting having to pay a much higher tax rate but to be honest most of those people will have cleared their loans by then anyway, especially with the imminent hiking of the ISA threshold to £15k/year.
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Hmm maybe I got my figures slightly incorrect. I am earning 75k basic with a £4k London weighting and could have sworn that it was something in the region of £529 that comes out every month. Will check on my payslip.
Might have something to do with the fact that I got a bonus at the end of the last tax year which somehow they assumed was my new monthly salary and therefor taxed crazily.
Bonus will be have 9% taken for SLC. They don't assume it's a new monthly salary, even if they did it wouldn't make any difference
I managed to find out APR for student loan (plan 1 before 2012)
2014/15 1.5%
13/14 1.5%
12/13 1.5%
11/12 1.5%
10/11 1.5%
9/10 0.0%
... - inbetween was raising and falling between 2.5% and 1.5%
08/09 3.54
07/08 4.8%
It was that first year in 07/08 that hammered me when I went travelling. I was told by student loan company that from September it the % will be falling to 0.9% However I am still tempted to pay off a chunk of my loan (it will be on about 16k now) Paying small chunks of 3 or 4k would soon get rid of it and wouldnt be a big hit like paying the full wack at once... that said, its only 0.9% apr now, so maybe leave the money in an isa where it earns 1.5%
2014/15 1.5%
13/14 1.5%
12/13 1.5%
11/12 1.5%
10/11 1.5%
9/10 0.0%
... - inbetween was raising and falling between 2.5% and 1.5%
08/09 3.54
07/08 4.8%
It was that first year in 07/08 that hammered me when I went travelling. I was told by student loan company that from September it the % will be falling to 0.9% However I am still tempted to pay off a chunk of my loan (it will be on about 16k now) Paying small chunks of 3 or 4k would soon get rid of it and wouldnt be a big hit like paying the full wack at once... that said, its only 0.9% apr now, so maybe leave the money in an isa where it earns 1.5%
Cleared mine last month. Quite a relief it is too. Only took 12 years
Better than mine. Graduated in 2008 and its more now than when I started!
50k is quite something else though. I feel for the students now paying 9k tuition fees a year and a loan that doesnt even cover rent and bills
Thread update. I decided to pay off a chunk of it in September and use a lot of my overtime to help pay some off every month for te past 5 months
If I want to get rid of it, is it best to do it before April / May so I do not continue to pay it then not get a refund from SLC for a whole year?
If I want to get rid of it, is it best to do it before April / May so I do not continue to pay it then not get a refund from SLC for a whole year?
Soldato
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