Student loans interest rate to fall due to BoE cut

Rikki

rb10 wrote: »

... but depending on base rate changes in the coming months, the rate can still change (up or down, but no higher than 3.8%) before the next "normal" change date of 1st September 2009.

My post was in answer to melancholly's question. He asked when it would start.

The annual review is in March which will set the rate for the following year ~ 1st of September 2009 to 2010. This will give the ceiling rate. This year its 3.8%

So we are both saying the same thing.

melancholly

(she ).....

Rikki

melancholly wrote: »

(she ).....

Sorry...............:o

argood

The rate will be effective from the 5th of December (which is when the last of the banks announced their decision) and will run until further notice. If the base rate goes up then the interest rate will go back up, but it won't rise above 3.8% this year. The next scheduled change is September 1st 2009 based on the RPI from March 31st 2009.

There will be an advert in the Metro, Guardian and Daily Mail tomorrow.

EDIT: And I've just noticed that the above has already been mentioned. Never mind.

littlemissmoney

Wow, excellent news!!!

poppy10_2

Any confirmation that this also applies to SAAS loans in Scotland? I took out loans in 1998-2002, but they aren't income contingent, I pay a fixed amount for a set amount of years, not a percentage of my salary. And I pay by direct debit, not directly out of my salary. I think this is a mortgage-type loan - are the rates being reduce on these too?

morg_monster

I read that the mortgage style loans (in England pre-98, at least) weren't being reduced as they aren't classed as "low interest loans" under the consumer credit act or something along those lines. I either read this in Martin's weekly news, or the NUS statement.
So this may well apply to your loan too poppy.

poppy10_2

Bah humbug. With my savings only earning a paltry rate, there's no way I can earn 3.8% after tax. Time to pay off my loans after all this time.

rb10

poppy10 wrote: »

Bah humbug. With my savings only earning a paltry rate, there's no way I can earn 3.8% after tax. Time to pay off my loans after all this time.

No, you now only need to earn 3% after tax to be in profit. 3.8% was the rate up until 4th December.

If your savings aren't earning that, get a new account!

poppy10_2

rb10 wrote: »

No, you now only need to earn 3% after tax to be in profit. 3.8% was the rate up until 4th December.

If your savings aren't earning that, get a new account!

Oh !!!!!!, it's not that hard to read 2 posts up before replying. I have an old mortgage-style student loan, which isn't being reduced in rate. Therefore I have to find a savings account that pays 6.33% before tax just to break even. Find me a decent account that pays that.