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Student Maintenance loan
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TheRealDave
Posts: 28 Forumite
I have no requirement for the maintenance loan offered. However. I pay it back at 4.5% interest (i think?).
Can i not take the loan, stick it in a high interest, no access account for the years I'm at uni then take the loan and initial interest to pay off the loan and be left with the other 5% (or so) interest?
It's a thought!
Can i not take the loan, stick it in a high interest, no access account for the years I'm at uni then take the loan and initial interest to pay off the loan and be left with the other 5% (or so) interest?
It's a thought!
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Comments
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You can indeed that’s what I’m doing, however with inflation so high the rewards are not as great as previous years. The current rate on student loans for this year is 3.8%, so sticking the money in a fixed bond for a year, making sure you register to have interest paid gross if you earn less than your personal allowance, or ISA paying around 7% or so, will have you profiting. You could also consider throwing in a student accounts interest free overdraft (better to put this in an instant access account in case they ask for it back from out of the blue). To quote Tesco, every little helps. : )
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I think i will keep this thing in my records so I can copy and paste, but here we go again:
Student Loan: 3.8%
ISA: 6%
Example of £1000 loan.
Student Loan after One Year (what you owe): £1038
Savings Account after One Year (what you have): £1060
Profit: £22 (may not be a lot however...)
Now, lets say over 3 years you save your maintenance loan, thats about £10k, so *'s the above by 10. Then after 10 years thats another *10. So thats quite a bit of profit you got there
Also don't forget, if you leave interest in the ISA it compounds year after year :T0 -
Student loan is 3.8%?
It says mine is 4.8% APR on the 'student schedule letter' but on the website it says 3.8%
Weird.0 -
Um, it may have been 4.8% last year? Think it was. It changes in September every year.0
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Well it was granted to me in august and was for the course i'm doing this year. Guess I got caught out on the old rate then?
Then again I havent applied for the maintanence yet so i could still get it at 3.8?
Also which is the highest rate account I can find? (dont care about bank) and it has to be fixed term so i cant withdraw the money 0 -
Ah I think I know what you mean. yes the letters are old, they just tell you what rate was at the time they gave you the letter, which is more likely then 4.8%.
Don't worry, it is 3.8% at the moment.
However, it will be abouet 5% I reckon next year, especially if BoE reduce IR's over the next few months.0 -
End of the day though, aslong as the savings account has a higher interest rate then my student load i am making profit. Even if it is pennies!
I've worked out with a 6% savings account, £2685 yearly maintenance loan and 3.8 interest on the loan by year 3 (when i finish my degree) I will be £384.17 up.
Of course the only threat I have is the interest rates changing dramatically.
Still looking for rates though. Lloyds do 6%, co-op do 6.59%
http://www.co-operativebank.co.uk/servlet/Satellite/1193206370514,CFSweb/Page/Bank-Savings
http://www.lloydstsb.com/savings/term_deposit.asp
What do you guys think?0 -
Best I found is 36 month High Interest Saving Account with http://www.kaupthingedge.co.uk/ at 7.5%
Should I go with that?0 -
No.
Go for an ISA. These are tax free.
When you start earning money, you will lose 20% interest on normal savings account. So 6% will go down to 4.8%. However, ISA will be 6% even if you aren't earning. You can put £3600 in each year.
http://www.moneysavingexpert.com/savings/best-cash-isa#best
Best one at the moment is Post Office 6.25%. Natwest have one but n ot sure on the rate.0 -
I should have added that I already have an ISA at the moment. It's a crappy 4.something% with the co-op bank :-/ I took that out a month or two a go without even thinking. Bummer. I cant change it until the years over, right?0
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