Student loan repayment

Mine 'overshot' by about £1.5k iirc and was a bit of a pain to claim back, but this was quite a few years ago now.

One thing to figure out is effective interest rate, depending on when you took out the loan this will be different. In some cases paying off the loan is a bad idea because you can earn more net from risk-free investments and/or you may have other more expensive debts that should be paid down first.
 
I switched onto DD last year. That's what's advised. Then you don't have to worry about your employer or SLC etc. It communicating and over paying.

By coincidence my final DD comes out tomorrow. And that's me done!

Been paying 180 a month recently so it will be very noticeable!
 
lunar said:
Are you looking to pay off a substantial amount? I recall listening to a podcast lady year where the Financial Advisor suggested investing the money rather than paying off the student loan.
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With interest rates for student loans about to hit 12% I imagine that financial advice is out of date.
 
goldy6660 said:
Hey folks, I'm aiming to pay off my student loan debt (finally after many years), aiming to pay it on debit card, does anyone know if when I do it like that then it'll stop coming out my salary? Heard all sorts of horror stories where loans company wait til the next tax year which would defeat the point.
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I waited until the last few hundred quid were left, just after a paycheque, and then rang them up and cleared the remaining balance on debit card. Deductions weren't taken next paycheque, so no problems. This was a couple of months ago.
 
A couple of years back when mine ended SLC told me to speak to them in the March / April before and get it changed to Direct Debit that they can control. Apparently they only tell HMRC to either keep reclaiming it or not once a year, so if you've less than a year left then it overshoots.

Easy phone call though and all sorted no issues, and last few months came off as a direct debit from my bank rather than an employer deduction.
 
dLockers said:
You should swap to Direct Debit first and then pay it off.
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I rang and talked to them about this...it isn't necessary. I was told to just wait and clear the balance when I was ready, and the payments would automatically stop being taken.

I explicitly had this conversation....don't I need to change to direct debit to avoid overpaying? Answer - nope, just pay it off when you're ready.
 
mid_gen said:
I rang and talked to them about this...it isn't necessary. I was told to just wait and clear the balance when I was ready, and the payments would automatically stop being taken.

I explicitly had this conversation....don't I need to change to direct debit to avoid overpaying? Answer - nope, just pay it off when you're ready.
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The advice was correct but also wrong. Everything should work perfectly. Except it doesn't. SLC themselves send out a letter when you are approx. 12 months from the end to switch to Direct Debit.

I guess the big dependency isn't SLC themselves but your payroll department being well structured enough to acknowledge and implement the changes.
 
dLockers said:
The advice was correct but also wrong. Everything should work perfectly. Except it doesn't. SLC themselves send out a letter when you are approx. 12 months from the end to switch to Direct Debit.

I guess the big dependency isn't SLC themselves but your payroll department being well structured enough to acknowledge and implement the changes.
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I got the letter from SLC telling me to switch to direct debit....

I rang them up to change to direct debit, and was told it wasn't necessary, to just call back when I was ready to pay it off, which I did, and it worked fine.
 
I paid mine off last year without switching to direct debit. I ended up paying 2 months extra before it stopped being taken from my pay. That wasn't the end of a financial year when the payments were stopped.
They paid me interest on the balance at the same rate I had been paying on the loan so I wasn't in any hurry to get the money back. Doubt that would be the case on the loans with higher interest rates though? Mine was 1.5% I think.
 
mid_gen said:
I got the letter from SLC telling me to switch to direct debit....

I rang them up to change to direct debit, and was told it wasn't necessary, to just call back when I was ready to pay it off, which I did, and it worked fine.
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The guy you spoke to clearly working on optimisim and good fortune as SLC have a horrendous history of being in the spotlight for "screwing this up", even if it isn't them screwing it up (payroll dept).

https://www.moneysavingexpert.com/news/2020/10/student-loan-borrowers-repaid-last-tax-year-that-t/
 
It can take 2-3 months for your payroll to be notified of the change, hence the stories of overpayments. Source: My o/h does payroll.

SLC advise you of this as has been said (I got the same), so I assume it's a process issue they can't/won't rectify.
 
mid_gen said:
I got the letter from SLC telling me to switch to direct debit....

I rang them up to change to direct debit, and was told it wasn't necessary, to just call back when I was ready to pay it off, which I did, and it worked fine.
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Yep that's what I remember. Had no issues with overpayment. I never went the DD route.
 
I'm still paying off my £3000 student loan 22 years later! To be fair I'm not a Gucci belt high earner and the most that has ever been taken out of my wages is £20 in a month.
It's usually only £1-£5 so i'll never pay it off.
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As others have said, plan 1 is not worth paying off earlier than you have to, current interest rate is 1.25%. I.e. its inflating itself away.
 
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