Student loan

[Jack]

Just musing about paying off my outstanding balance on my old small student loan.

Reason being, my savings account is an ISA - as things stand, I should be at the max yearly input around December time, leaving me a few months with nowhere to put my monies other than a crap rate standard savings account. In those few spare months before next April, I'd have enough stocked up to easily wipe out the student loan balance, which will be just under the £2k mark.

Now I know its a cheap loan etc, but at my current repayment rate (£85) I'm looking at around 2.5 years before its cleared; possibly longer the way my job prospects are looking :roll: (edit: by that I mean a reduction in wages by a few K, not redundancy!) I see that monthly £85 as a couple weeks worth of fuel, or an extra chunk into my savings, whatever. That £85 could be going into my ISA and earning me double the rate of interest than it costs on my student loan.

Or would it make more sense to divert that spare money into a crap rate savings account til April 4th then swap it into my ISA to kick start the savings for that year. All the time paying out the £85 of my wages into the student loan.

Other that the student loan, I've got no other debt, and my savings are 'healthy' lol.

Any input, thoughts or options?

[Alex J]

knock them??lol

[Stuart]

grey area, I mean its 0% at the moment isnt it? I'd keep saving etc till you 'have' to get more money monthly and then pay it off in one hit.

[Jack]

Its 1.5% at the mo Stu, since september last year; prior to that it was 0 for a year.

I was thinking most non-ISA savings accounts are less than 1% at the mo unless they either have intro bonuses, fixed terms or withdrawl penalties

This is all hypothetical at the moment though I suppose, for all i know I might end up living in Bristol spending £1k on rent each month come the end of the year lol

[Stuart]

if you had the loan before 1998 it was on -0.5% for a while lol

[Jack]

Yeah, but its currently 4.4% and will be 5.3 in September lol

[Stuart]

ouch! Glad I paid mine off this time last year :)
And we think Carly has paid hers off so we shall start the fun and games of making them refund the extra and stop the payments

[Ben]

wasnt a student loan but i paid of both my loans this month and the feeling of not owing anyone anything is a great one and i would highly recommend it, if you have it then pay it off. Saving in a standard savings acccount then swapping into next aprils isa will just snowball the overpayments this time next year and you will have the same dillema then,

[Jeff16v]

At the mo I'd say clear as much as possible debt wise at the mo.

[Jack]

wasnt a student loan but i paid of both my loans this month and the feeling of not owing anyone anything is a great one and i would highly recommend it,
Yeah, I paid off some remaining debt at the start of this year (aside from the student loan lol) and its good to see the money I would be paying off that going into a savings account - which is why I was thinking about blobbing off the SL; £85 isn't much in the grand scheme of things but I'd rather it was going into my account rather than someone else's lol

Stu, whats the process of stopping the payments? I had a sneaking suspicion it wouldn't be as easy as contacting the SLC, making a one off payment on card to clear the remaining balance, then the deductions stopping... :(lol

[Stuart]

hactually it is that simple.

Call SLC you will get through to a grumpy old scottish lady (I think shes the only person working there), ask to make a one off payment and put a stop on the rest of the year. You will have to send copies of payslips from April to now to prove what has been paid thus far against the balance you had in March/April and then you can clear the rest and have the stop put on the wages.

[scott.parker]

Give me the £85 i need it more..

[Hayley]

So am i reading this right -its either keep having money in savings and pay the £85 a month.. or empty said savings and cancel the £85 payment. I dont think thats a good idea with your current situation. If you are thinking you are going to be moving out before the end of the year is up, you are going to need your savings for moving costs and deposits etc..

[Jack]

So am i reading this right
No.


lol

[John]

Awhat-isthisstudentloanbusines-now?

[Jack]

Edumacation ain't free, brah! lol

[Stuart]

Just imagine having £30k+ to pay back lol

[hendrix]

My student loan stands at nearly 12k but I don't understand why as I've been paying 100 for the last 2 years, before that I paid nothing and I graduated in 2005. I'm guessing it accrued 4 years interest and that will be the reason.
Anyway, there is a good article on MSE somewhere which seemed to make sense.

If I were you Jack, I'd use your surplus to save up for moving out etc. Just keep chunking away at the student loan as you've got used to the money going at source every month, you don't miss it if you get me.

[John]

Just imagine having £30k+ to pay back lol

Er No ta, leaving university in your first year ftw lol

[hendrix]

Just imagine having £30k+ to pay back lol

The new system isn't that bad though, well not as bad as the press makes out one can come up with any sky-high debt figure you like, but virtually no-one will ever have to pay that amount off. In fact, to fully pay back the new tuition fees alone (£27,000 over three years) within the 30 year time-limit, you would have to be earning an annual salary of around £48,000 from the day you left university.

As such, it wouldn't matter if your total debt was £150,000, if you ended up with the same £25,000 a year job, the amount you actually end up paying back would be no different than if your debt was £30,000.

The repayments are based on a percentage of income over £21,000 (£15,000 under the current system and the same interest rate is applied) and are written off after 30 years (you carry them until you are 65 years old under the pre-2006 system I'm on). Even though I borrowed less than I would have after 2012, based on my current salary, I'll end up paying a lot more over the years than somebody graduating in 2015 who ends up earning the same amount as I currently do.

Or at least thats my understanding lol

[Stuart]

Surely if the govt wanted to have good people at unis and subsequently in high paying jobs to pay more tax/vat then surely the scale should be high at the bottom end and dropping down the more you earn lol. That would drive you to get promotions and payrises and so on (of course there would need to be a high point where you have to pay back a shed load of it too.

[hendrix]

thats too logical for our illustrious leaders lol

[Jack]

That would wipe out all the disney degrees, as only people who would be looking at 50k+ wages would bother with a degree then. That could be a good thing, but then you'd be looking at either surgeons, nuclear physicists, or civil service project managers coming out of uni lol

Actually, no I like that idea, as it would kill IT degrees too; so I might be able to get a job on experience before 20-something year old billy the kid with a computer science degree in how to plug a router in but no idea how to handle people (its only programmers that are supposed to have the social section of the brain removed) comes along and wazzes interviewers with his bits of paper and nicks the jobs I want.

I'm not bitter at all btw lol


Anyway, there is a good article on MSE somewhere which seemed to make sense.
Yeah, read that. Thing is though the interest rate I'd be earning if I was to save the ~£2k would be less than the 1.5% the SL costs me, hence it would be surely more worthwhile to dick the SL off once and for all. I know £85 isn't much in the grand scheme of things, and yes I've been used to paying it off for the past 5-6 years (IT wages suck lol) but thats not always been the same amount. Plus I'd much rather the money was in my savings account rather than paying for Cameron to wipe his ass with lol

I know in real terms, 1.5% is less than inflation, so the money is technically reducing every year even by just sitting there, blah blah blah, but thats a complete moot point as my wages will no doubt be staying stagnant (or probably going down) in future. So the money I have in my pocket stays the same, where as the interest keeps the loan amount going up - so the loan 'value' still increases.

warble warble warble

[Andy]

You shouldnt moan,have you seen cash converters interest rates LOL
And feck me bright house??!!! Jesus H Christ!!!!!!
I bet the Krays did better rates lol lol lol

[Jeff16v]

I bet the Krays did better rates lol lol lol
Lmfao

Idea, jacks £85 payday loans, 2177% and a go on an unbroken eyre

[marc69]

I let my student loans pay off naturally as I thought if i had spare money I would rather use it for other things as i grudged paying back the money in the first place..

It took me until the tender age of 36years old before it was finally paid!

Imagine how much harderr this is going to be for this generation and bearing in mind, a lot of my friends who left school at 16, have more money and far better jobs than mine (which thanks to even more cuts is realy rubbish now)

Moan over

[Jon_nova1]

pay the loan.

If you have 2 1/2 years left on it and things go bad, well you still have £85 going out

another thing to note is your paying 0.5% over 2 1/2 years which would equate to 1.5% over one year if condensed technically. so over 2 1/2 years you would be saving the same as in a 1.5% savings account over one year, which in essence is better, but in a years time you will still have the problem of a full ISA

[Bubba]

pay it off and get it out the way.

[blue_peg_16v]

Tbf I think I'd leave the loan and keep the savings and bang it in the ISA in April in the current economy you never know what could happen and if you happened to loose your job the stu loan payments would stop but the extra savings could be handy I'd personally rather have the money in my bank as a rainy day fund and keep paying the loan

[Stuart]

You need to be a little coy about your savings with regards to student loans too... When I had a 3 month 'retirement' between voluntary redundancy and new job starting I was hassled weekly by SLC to prove how I was living without a job, and because I was able to live without a job or benefits they wanted in on the money too. Luckily they process repayment details so slowly I got into the new job before they kicked off lol.

[MK999]

Move abroad, forget to tell SLC, win lol