Should I Pay Off My Student Loan? 2008/09 article discussion

The_One_Who

spendthrift2005 wrote: »

Since the base rate decrease my tracker mortgage is now at an interest rate of 3.54%. This is lower than the student loan interest rate of 3.8%...
...so should I make overpayments on my student loan rather than my mortgage?

I have used up my ISA allowance already and already have a regular saver so don't think I could do any significant saving with the money.

Comments appreciated, I'm a new member so sorry if i'm posting in the wrong place

Always overpay on the mortgage (if you are allowed to without being slapped with fines or charges) since this is not income-dependent. If you were to lose your income for some reason you would still have to pay the mortgage whereas with the student loan you will not need to make repayments. Getting the mortgage paid off is more important than the student loan.

studEm

Please help - I graduated in 2002 and the Student loan people have never started taking money off me i have a scottish loan from SAAS, i live in England. I've updated my address with them and the inland revenue and still nothing.
Should I get in touch with them and tell them that i'm earning over the threshold and start taking it of me? Or should I just leave it?

Is anyone else in this situation?

Masomnia

studEm wrote: »

Please help - I graduated in 2002 and the Student loan people have never started taking money off me i have a scottish loan from SAAS, i live in England. I've updated my address with them and the inland revenue and still nothing.
Should I get in touch with them and tell them that i'm earning over the threshold and start taking it of me? Or should I just leave it?

Is anyone else in this situation?

If I were you I'd be honest and up front with them as soon as possible. They may ask for a lot of money that you should've paid up to now, but the fact that you've been honest with them should count in your favour if you need to negotiate a payment plan. On the other hand you might just have to start repayments.

This is much better than them finding out for themselves in a few years time a sending you an even bigger bill for money you don't have.

ad1jnl

How do student loans stand in relation to other debts? Basically I was at Uni from 95-99 and took out 4 loans which now total £8k outstanding. Only started earning over £25k until I got a new job in November 07 and the minimum repayments were £160. Problem was I'd arranged a mortgage and moved into my flat in November. Now this put my budget completely out of plan. I did contact the student loan company before I started repaying in March to try and reduce payments. They basically told me I couldn't do this as the minimum payment was not negiotable. I had debt then but have since accumulated more because of having to cover the added loan that I did not factor in. When I negiotiated the mortgage the job wasn't there!! Also, it took my slightly - by around £500 pa over the threshold - my budget was a bit stretched as it was. I've reviewed my finances and have worked out that I can pay the total amount over 5 years (while maintaining minimum payments on the other loan/credit cards) but with reduced payments for around 2 years increasing in later years. I am due to get increments in my job for at least the next 6 years (I work at a University) and have just qualified as an accountant so hopefully may get another job within the next year or two. Does anyone know how likely that the student loan company are to accept this or are they likely to request that I contact other creditors. Obviously I would like to ensure minimum payments on the loan and cards as they are less likely to affect my credit rating - I'm also due to remortgage next year and this could be affected. Any info would be most welcome.

Thanks
Jon

neas

My student loan takes 9% out of my salary each month above 15k.... its non-negotiable.... and I dont ever see the money... best way really so you can budget without it.

anniecave

ad1jnl - if you graduated in 1999 you are on the old loans system - yes? - where the SLC take a monthly direct debit from your bank account?

In my experience student loan company are totally unflexible and if your income is more than the threshhold then you need to be able to pay them the specified amount. You will need to contact your other creditors etc. Have you made sure there are no other cuts you could make in your expenditure or is there any way you could get more income (eg taking on a part time job?). Is your mortgage fixed rate or variable? I ask this as interest rates have just come down so your payments may also reduce if you are on a variable rate?

TigerLily7

Loans taken between 1998 and Sept 2006 are wiped clean in the following circumstances:

• When you reach 65
• If you become permenantly unfit to work
• If you die

I took out a loan in 2005 and have continued to take it for subsequent years, does this mean the one year prior to 2005 is subject to these rules and the following years fall subject to loans taken from 2006 onwards?

Thanks in advance!

TigerLily7

Sorry, this is all the info for question above.


Loans taken between 1998 and Sept 2006 are wiped clean in the following circumstances:

• When you reach 65
• If you become permenantly unfit to work
• If you die

Loans taken after Sept 2006 are wiped clean in the following circumstances:

• If they're not repaid 25 years from the first April of graduation
• If you become permenantly unfit to work
• If you die

melancholly

to post 159 - as far as i understand it, you are only ever on one single loan system. this will be the one in place when you started, which is what you will have been on all the time you were a student.

(i'm basing this on a few years ago - when i was paying fees but those in years above weren't! they don't change the rules on you while you're there - just before you start )

xpanda

How do you handle your student loan if your self employed and earning under £16,000

any help would really be appreciated