HELP ME! Pay back student loan? Confused..

cheer10

Ok so I have read everything on here, and accept the arguement for not paying it back.. sort of

So what's the best thing to do in my situation? I am about to embark on a year of high living costs and a low salary. should i try and save whatever i can into an ISA (which don't seem to offer much at the moment) or use this money to pay back my £14k loan in chunks.

What is best to do considering that interest will be 0% from September? Does this really mean that my loan will stay at 14k fo a year???

HElp me pleeeeease!!

Lokolo

Means it will stay at whatever it is come September.

Save whatever you can. Automatic payments will come out of your salary if you earn over £15k. Other than that you don't have to pay it back.

tootie

Your student loan will already be having interest added to it....
To keep the amount from getting larger you could phone the SLC and find out what the monthly interest is and then set up a standing order from your bank account to cover this. - you could cancel it once you earn over 15K as the SLC will take money out of your wages automatically.

As for paying it off - save up your money - an ISA or a bank/savings account with the best interest rate you can get. If you find yourself not needing the money then you could use it to pay off the loan in lumps..... but as you said - a year of high cost- low wages... you may find you need to save for a rainy day!!!

Dont panic about paying the loan off... you have plenty of time to do this when your eaarning enough dosh to do it!!!

cheer10

Thankyou! So just to clarify.. come September, when I will be earning enough for automatic payments to come out, these will start to pay back the actual bulk of the loan because interest will be 0%? And rather than use my money to pay back extra loan, I should save it so it earns interest..

Am i right? It so confusing and I am so shocked at how much interest has been added whilst i was at uni.

cuthbertlilly

save, save, save. as Martin's guide on the main website says there is no point right now in paying off the loan. my loan is c£12,800 now from my time at uni in 200-2003. i only pay off the salary deductions. you'd be mad to pay chunks off, especially with the 0% interest.

say you wanted to buy a house or a new car - you'd probably need a loan - which would be at least 5% (maybe higher). the lender could demand repayments. the student loans company cannot demand payments from you over and above the salary deductions, so DO NOT pay any of it off - yet. you can always review your position next year.

cheer10

Thanks , any reccommendations of a savings account? I currently have a Barclays mini ISA and it made £2 in April... woo!