Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Hybrice
    • By Hybrice 14th Feb 18, 8:36 PM
    • 7Posts
    • 0Thanks
    Hybrice
    Should high earners pay off student loans??
    • #1
    • 14th Feb 18, 8:36 PM
    Should high earners pay off student loans?? 14th Feb 18 at 8:36 PM
    Hi guys,

    I need a bit of help and advice please.

    I left uni in 2011 with 24k of student debts, however I've been very lucky and landed multiple jobs (50k+) since graduation, so I'm on my way to paying it off (16k remaining), so judging by the past 5 years I'll easily repay my loan within 30 years, the question is - I'm due to receive a bonus of 20k, is it smart to simply use this to wipe out the debt, or am i more sensible saving it? Currently my student loan is about £450/month due to my salary being as high as it is.
Page 1
    • Pixie5740
    • By Pixie5740 14th Feb 18, 8:40 PM
    • 11,707 Posts
    • 16,455 Thanks
    Pixie5740
    • #2
    • 14th Feb 18, 8:40 PM
    • #2
    • 14th Feb 18, 8:40 PM
    I have my bonuses paid straight to my pension to avoid paying tax on it...at least until I retire and hopefully that should be at the basic rate.
    • Hybrice
    • By Hybrice 14th Feb 18, 8:42 PM
    • 7 Posts
    • 0 Thanks
    Hybrice
    • #3
    • 14th Feb 18, 8:42 PM
    • #3
    • 14th Feb 18, 8:42 PM
    Unfortunately that isn't an option as I work abroad (Ireland)
    • Shakin Steve
    • By Shakin Steve 14th Feb 18, 8:59 PM
    • 1,328 Posts
    • 1,004 Thanks
    Shakin Steve
    • #4
    • 14th Feb 18, 8:59 PM
    • #4
    • 14th Feb 18, 8:59 PM
    Hi guys,

    I need a bit of help and advice please.

    I left uni in 2011 with 24k of student debts, however I've been very lucky and landed multiple jobs (50k+) since graduation, so I'm on my way to paying it off (16k remaining), so judging by the past 5 years I'll easily repay my loan within 30 years, the question is - I'm due to receive a bonus of 20k, is it smart to simply use this to wipe out the debt, or am i more sensible saving it? Currently my student loan is about £450/month due to my salary being as high as it is.
    Originally posted by Hybrice
    Are you on Plan 1?
    I came into this world with nothing and I've got most of it left.
    • Hybrice
    • By Hybrice 14th Feb 18, 9:15 PM
    • 7 Posts
    • 0 Thanks
    Hybrice
    • #5
    • 14th Feb 18, 9:15 PM
    • #5
    • 14th Feb 18, 9:15 PM
    I'm not sure, I'm on the 9% tarrif, however as I'm Ireland based my threshold is £14k not 21k, my interest is only 1.5%, I have no other debt or finance to pay
    • Hybrice
    • By Hybrice 14th Feb 18, 9:24 PM
    • 7 Posts
    • 0 Thanks
    Hybrice
    • #6
    • 14th Feb 18, 9:24 PM
    • #6
    • 14th Feb 18, 9:24 PM
    I'm not sure, I'm on the 9% tarrif, however as I'm Ireland based my threshold is £14k not 21k, my interest is only 1.5%, I have no other debt or finance to pay
    • boo_star
    • By boo_star 14th Feb 18, 9:51 PM
    • 1,379 Posts
    • 756 Thanks
    boo_star
    • #7
    • 14th Feb 18, 9:51 PM
    • #7
    • 14th Feb 18, 9:51 PM
    I'm not sure, I'm on the 9% tarrif, however as I'm Ireland based my threshold is £14k not 21k, my interest is only 1.5%, I have no other debt or finance to pay
    Originally posted by Hybrice
    If the interest you can earn on the 20k is more than the student loan, save it.

    If it isn!!!8217;t, pay it off.

    Edit: Presumably by Ireland you mean Northern Ireland?
    Last edited by boo_star; 14-02-2018 at 9:53 PM.
    • Hybrice
    • By Hybrice 14th Feb 18, 9:55 PM
    • 7 Posts
    • 0 Thanks
    Hybrice
    • #8
    • 14th Feb 18, 9:55 PM
    • #8
    • 14th Feb 18, 9:55 PM
    No, southern Ireland, republic of Ireland.

    My logic is, either I keep paying £450 a month for the next four years, or I use this one time windfall to blast what's owed and be £450 better off each month.
    • boo_star
    • By boo_star 14th Feb 18, 10:03 PM
    • 1,379 Posts
    • 756 Thanks
    boo_star
    • #9
    • 14th Feb 18, 10:03 PM
    • #9
    • 14th Feb 18, 10:03 PM
    No, southern Ireland, republic of Ireland.

    My logic is, either I keep paying £450 a month for the next four years, or I use this one time windfall to blast what's owed and be £450 better off each month.
    Originally posted by Hybrice
    Well the maximum interest rate for savings I can find in Ireland is 1.5% for a 10 year bond (which is ludicrously low but anyway)

    Unless you foresee a significant increase in the interest rates being offered in the next 3 years or so it’d be better to just pay it off and have the peace of mind that your entire salary is now yours (minus whatever the taxman helps himself to of course.)
    • Shakin Steve
    • By Shakin Steve 15th Feb 18, 6:48 AM
    • 1,328 Posts
    • 1,004 Thanks
    Shakin Steve
    It's a toss of the coin one to me, but I don't know your personal circumstances. If you job is rock solid, pay it off. But if there's even the slightest chance that you could have a period of less/no income in the next couple of years, then you may need some cash behind you.
    I came into this world with nothing and I've got most of it left.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,816Posts Today

7,091Users online

Martin's Twitter