Should I pay my student loan off with a loan?

I earn 45k and have an outstanding plan two loan of £10k with the slc charging 6.1%.


Is it cheaper to get a zopa loan and pay it off or continue as is paying £185 a month

Comments

  • I'd wait until the political review of student loans becomes clearer.

    But Zopa's cheapest rate would be better value rate wise if you have no expectation of reducing earnings and having it written off decades down the line.
  • Definitely wait it out as politics might change this whole situation
  • Yeh the thing is - I doubt very much my pay would decrease and I would have it written off as its only 10k but is rising yearly at a rate of nearly double the cheapest loan.....
  • JSCB
    JSCB Posts: 52 Forumite
    In a very similar situation, I'm on track to take home about £37k this year (taxable) and started with 15k of SL debt of which I've paid off £6k in the last few months. Not sure now whether to continue making voluntary contributions as planned and be rid of it by this summer or to wait.

    To be quite honest, I wish the politicians would just leave it all alone, because every student knew what they were signing up for when they took the loan but being unsure of what they'll do with them going forward makes it hard to know whats best. You wouldn't borrow from a bank and have them change the rules, drop the interest rates, tell you you don't have to pay anything back, etc. after you've already taken the loan.

    On one hand I want to just carry on, overpay, get rid and then never worry about student loans and what they will or won't do, and what is and isn't going to be best ever again, but of course on the other hand I do worry that I'll pay them off and then Jeremy Corbyn ul be elected in a few years and abolish everybody's or reduce the interest rate to inflation only or something. But even then, if I paid no more off and that was the case, I've already paid off 6k which I can't get back, so I'd still be pretty annoyed anyway! Lose, Lose Really
  • nic_c
    nic_c Posts: 2,928 Forumite
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    If to get a loan and you think that your loan would be paid off in the 30 years via the SLC, then it makes sense to pay it off. Whilst for many people it doesn't because they won't pay the full balance within 30 years, so it's irrelevant what the APR is, if yours will be then paying it off sooner may make financial sense.
    Student finance may be a political hot potato at the moment, I doubt any decisions will be retrospective. So if they increase grants, limit fees or interest rate it is likely to be only for future students - even Jeremy Corbyn and to emphasise the ban on student loans would not be for existing graduates.
  • JSCB
    JSCB Posts: 52 Forumite
    nic_c wrote: »
    If to get a loan and you think that your loan would be paid off in the 30 years via the SLC, then it makes sense to pay it off. Whilst for many people it doesn't because they won't pay the full balance within 30 years, so it's irrelevant what the APR is, if yours will be then paying it off sooner may make financial sense.
    Student finance may be a political hot potato at the moment, I doubt any decisions will be retrospective. So if they increase grants, limit fees or interest rate it is likely to be only for future students - even Jeremy Corbyn and to emphasise the ban on student loans would not be for existing graduates.

    Do you doubt they'll be retrospective, even if its as simple as reducing the interest rate to inflation only? And therefore if they do decide in thisnthey will create another plan 3 group, for those studying 2019 onwards say, while all those under plan 2 and plan 1 would continue with the same rules and rates they took when they started?

    If they reduced the interest rate for everyone, to inflation only say it'd then make more financial sense to put the money into long term funds rather than make early repayments, but then I suppose you don't get the sense of achievement of clearing the debt.
  • nic_c
    nic_c Posts: 2,928 Forumite
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    JSCB wrote: »
    Do you doubt they'll be retrospective, even if its as simple as reducing the interest rate to inflation only? And therefore if they do decide in thisnthey will create another plan 3 group, for those studying 2019 onwards say, while all those under plan 2 and plan 1 would continue with the same rules and rates they took when they started?

    If they reduced the interest rate for everyone, to inflation only say it'd then make more financial sense to put the money into long term funds rather than make early repayments, but then I suppose you don't get the sense of achievement of clearing the debt.
    Yes I doubt it will be retrospective, because it would cost more. Limiting interest for those who will start studying from 2019 has the same headlines, but less of a cost esp as otherwise they probably would have to compensate the SLC. Maybe they will limit future increases for those with existing debt, but it's all about how much it costs.
  • Mogley
    Mogley Posts: 250 Forumite
    In the OP's situation, it makes sense to pay off your student loan as quickly as possible. However I would be cautious on getting another loan for this purpose. Remember that if you lose your job, the Zopa loan (using your example) would still need to be paid but the student loan would not (if you kept it). That's the risk you'd take. Consolidation for a better interest rate with less favourable terms.


    I would just overpay what you can afford each month via direct debit.
    You should pay attention to the needs of the moment - otherwise there is no future. But to ignore the future is foolish - living solely for the moment leaves nothing for when the next moment arrives.
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