Student loan re-payment

jon86 said:
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
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It's actually £83,600.
 
1. Go to Uni
2. Take out Student Loan
3. Spend it on pizza, beer, partying, having a good time, etc
4. Forget it ever existed
5. Get on with your life

Job Done.

I don't care how much I pay each month, I don't care or even know what I have outstanding on mine.
 
Skeeter said:
I don't care how much I pay each month, I don't care or even know what I have outstanding on mine.
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Yeah, it's not like it's a "proper" loan - doesn't even show up on credit reports.

Think mine will be around £75k when I've finished - doesn't borther me in the slightest.
 
I've only got a small bit of my loan left. I only took out a £9k loan though.

It was taken into account when I got my mortgage but soon I will have £220 a month back in my pocket.
 
I'm confused about what I'm reading here, although I understand that the interest rate means there is little point paying it off does it or does it not affect your long term ability to get a Mortgage?
 
amigafan2003 said:
Yeah, it's not like it's a "proper" loan - doesn't even show up on credit reports.

Think mine will be around £75k when I've finished - doesn't borther me in the slightest.
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Jesus, I graduated with £10k and I thought that was steep. At least the way the finance is structured is less painful than the American system, but still, £75k to get a half decent education.
 
Ignoring moral issues, is there really any point paying off a student loan? What will this have an affect on long term?

I can pay it all off in one payment but would rather spend the money on something useful, obviously.
 
peige said:
Then why this?
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There was no student loan "check box" on my mortgage application. The only way I could see them taking it into account is due to the reduction in your income which will show up on the bank statements and payslips you submit. That would have an impact on the affordability calculation I'd guess.

ebilcake said:
Ignoring moral issues, is there really any point paying off a student loan? What will this have an affect on long term?

I can pay it all off in one payment but would rather spend the money on something useful, obviously.
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The only reason I can think of is that you would rather have the monthly increase rather than a lump sum of the total amount, possibly relevant if you're not great at managing money in the long term, but then again it opens you up to risk. It would save you the 1.5% interest I suppose, though if you have other debts you're better off hitting those.
 
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peige said:
I'm confused about what I'm reading here, although I understand that the interest rate means there is little point paying it off does it or does it not affect your long term ability to get a Mortgage?
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In terms of credit checks, no.

It is obviously taken into consideration as part of the affordability calculations though, as is everything you pay each month.
 
Skeeter said:
In terms of credit checks, no.

It is obviously taken into consideration as part of the affordability calculations though, as is everything you pay each month.
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Yeah, it isn't like other debt which is added up and then the total debt subtracted from the maximum loan amount.

They only look at your student loan to workout affordability (I.e. how much you take home each month after deductions).

So in essence, no, student loans don't materially affect your chances of getting a mortgage.
 
FortuitousFluke said:
Jesus, I graduated with £10k and I thought that was steep. At least the way the finance is structured is less painful than the American system, but still, £75k to get a half decent education.
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Admittedly, mine does include a BSc, PGCE and PhD.
 
amigafan2003 said:
Yeah, it's not like it's a "proper" loan - doesn't even show up on credit reports.

Think mine will be around £75k when I've finished - doesn't borther me in the slightest.
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But are you not already retired or something? So you obviously care not about paying it back.

peige said:
I'm confused about what I'm reading here, although I understand that the interest rate means there is little point paying it off does it or does it not affect your long term ability to get a Mortgage?
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It doesn't really affect your ability to get a mortgage, no. But it does impact how much of a mortgage you might be able to get.

FortuitousFluke said:
There was no student loan "check box" on my mortgage application. The only way I could see them taking it into account is due to the reduction in your income which will show up on the bank statements and payslips you submit. That would have an impact on the affordability calculation I'd guess.
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This is exactly what happened to me. I pay between £250-400 per month, depending on how much I work in a particular month, but it wiped off £100k off the top of how much of a mortgage I could get. As it was, I was only just able to re-mortgage last time, as opposed to taking a much smaller mortgage than possible when I bought the house (I was working in Holland at the time, with a similar income, but no SLC repayment due to them not being able to take it from a foreign paycheck).

I should be finished paying it later this year. Mine was £16k I think, and will have been paid off in a little under 4 years.
 
darkgen said:
I'm curious; what degree type and in what field are you studying which is likely to cost £75k on completion?!
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BSc is Interactive Media Developement. Masters/PhD will be in Child Computer Interaction.

xs2man said:
But are you not already retired or something? So you obviously care not about paying it back.
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Well, I did retire yes. But since then I've had a job offer I couldn't refuse including funding me through a PhD (but I'll still take the post grad loan). However, I'll be 43 when I finally graduate, so the chances of me paying it back in full before I'm pension age is slim to none.

It doesn't really affect your ability to get a mortgage, no. But it does impact how much of a mortgage you might be able to get.
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It doesn't affect the maximum loan value, just the monthly affordability calcs. It isn't like other debt which is added up and then the total debt subtracted from the maximum loan amount.


This is exactly what happened to me. I pay between £250-400 per month, depending on how much I work in a particular month, but it wiped off £100k off the top of how much of a mortgage I could get. As it was, I was only just able to re-mortgage last time, as opposed to taking a much smaller mortgage than possible when I bought the house (I was working in Holland at the time, with a similar income, but no SLC repayment due to them not being able to take it from a foreign paycheck).
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I've never heard of it affecting the maximum loan amount - and believe me, I've done my research. I think you're making it up or are confused about what really happened with you mortgage application and why you didn't get the loan amount you were expecting.
 
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amigafan2003 said:
Well, I did retire yes. But since then I've had a job offer I couldn't refuse including funding me through a PhD (but I'll still take the post grad loan). However, I'll be 43 when I finally graduate, so the chances of me paying it back in full before I'm pension age is slim to none.
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I was just reviewing the student finance application on the gov.uk website. I'm quite surprised savings are not taken into consideration when applying for a loan.

What's not to stop retirees clogging up academia supported by the public purse?
 
Banks have always asked me what "loans I have including credit cards and student loans" - as they take into account when seeing how much you can afford to pay per month. Which makes sense, as it's a consistent outgoing.
 
amigafan2003 said:
I've never heard of it affecting the maximum loan amount - and believe me, I've done my research. I think you're making it up or are confused about what really happened with you mortgage application and why you didn't get the loan amount you were expecting.
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Well, it did absolutely happen like that.

When I applied for the (re-)mortgage, I had forgotten to include my student loan in the initial application, as I had only really paid it a couple times at this stage, being new to working in the UK (I had previously only done international work, despite living in the UK), and I was offered £xxx,xxx of a mortgage. Then when I added it into the calculation, I was offered only £(x-1)xx,xxx mortgage. Luckily this was still enough to go ahead with the re-mortgage, but it was a LOT tighter than the initial figure I was given.

I also research things like this, and this is exactly how it happened. It may be rare, be a policy of my particular lender, I don't know. But this is how it happened for me, in this case, regardless of your research.
 
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