Student Loan: Am I doing the wrong thing?

Oldernotwiser

CLAPTON wrote: »

if you only have 7000 in saving then you need to compare these two options


a. keep the 10k loan and save the 7K.
as long as the interest rate on the saving is greater than 3.8% then its worth doing

or
b. use the saving to pay off 7k of debt, leaving just 3k of debt costing you 3.8%

whether or not your interest earned on ISA 7k is greater than the interest paid on the slc 10k may be of interest but its irrelevant to a rational decision on whether to pay the loan off.

That makes sense in the short term but not if the money is likely to be needed for something like a house deposit before very long.