Is now a good time to pay off student loans?

mod83

I've read the article on this, but I'm figuring that the best savings rates at the moment are generally equal to - or worse than - the current student loan interest rate.

I received my loan between 2003-05 totalling around $13k. I've saved over double that since then, split between an ISA and high interest savings accounts. Would now be the time to get rid of it? The loan gained over £400 in interest last year alone.

Should I just pay it off in one go? And are there any consequences for doing so (charges?)... It seems the savings to be made by holding out are negligible.

smoothgroove

With interest being so low I'd certainly pay off the student loan, leaving your future to fully focus on your savings, unless your specifically saving for something like a house deposit. But obviously don't use your ISA savings to pay it off.

mod83

Many thanks for this - it's just the reassurance I need. :j

anotherpaul_2

I totally disagree. Save the money as a deposit for a house or for a rainy day. Mortgage companies treat you as having a slightly lower salary in exchange for your student loan payments. It's the cheapest / softest loan you will ever get. Pay it as slowly as possible.

The student loan interest rate is 2%, and will go down if the BoE cuts rates again (it's limited to 1% above base rate). You must be able to find a savings acount that pays more than that.