Repaying Student Loans 2009/10 guide discussion

MrsManda

MrEmptyMoneyBag wrote: »

I got my first loan in 09/10 and will get more loans for the next 3 years as I am studying at university; I will finish with around 22k in debt. I am unsure about the interest charges, can someone explain them to me or direct me to information on them. Thanks for the help

Interest gets charged on the loans you recieve from the moment you recieve them until you've paid them off. The interest rate applied changes each year and is based on the Retail Price Index. The basics plus what the interest rates are can be found on the SLC repayments website.
You will be eligible to start to repay your loans from the April after you leave university though you will only start repayment once you are earning over £15,000 gross.
HTH

MrEmptyMoneyBag

MrsManda wrote: »

Interest gets charged on the loans you recieve from the moment you recieve them until you've paid them off. The interest rate applied changes each year and is based on the Retail Price Index. The basics plus what the interest rates are can be found on the SLC repayments website.
You will be eligible to start to repay your loans from the April after you leave university though you will only start repayment once you are earning over £15,000 gross.
HTH

Thanks for the advice. I've got one question though, How do I know if my loan is a fixed term or income based loan? Thanks :T

Oldernotwiser

MrEmptyMoneyBag wrote: »

Thanks for the advice. I've got one question though, How do I know if my loan is a fixed term or income based loan? Thanks :T

Fixed term loans finished about 10 years ago; yours is income based.

HAMMYLIV

Hi,

I received an interim statement from the Student Loans Company today. It states that my contributions from HM Revenue & Customs for tax year 06/04/2009-05/04/2010 are 0. However, from April-August last year I was in employment in a job where I was earning in excess of 15,000 a year. I made contributions to my student loan payment (totaling around £500) through PAYE. As I left the job in August over the full tax year I earned less than 15,000 but I still made those contributions from April-August.

Do I need to contact the inland revenue or the student loans company? Or am I likely to receive a refund for my payments as over the full year I earned less than 15,000? Why has £500 vanished!

martmatt

I've just read the "Should I repay my student loan?" article and have a question.

I have just recently received a pay rise and for the first time am over the repayment threshold so will have to start to repay in April.

I always imagined that when repayments are calculated it is dependant on the current interest rate of the year for the five years of the payments. Martin's article's maths splits it into simple 60ths.

The directgov website states:

"Monthly repayments are calculated on the basis of the total amount you borrowed. This is then adjusted according to the current student loan interest rate and divided by the total number of months over which you’re scheduled to make repayments.

I read this to mean that if I was to arrange to start repaying voluntarily before September I would effectively be freezing the loan at -0.4/0% percent and be immune from the hike to 4.4 % in September and subsequent hikes in the future, saving hundreds on a loan of £8500.

Is this a viable/permitted strategy?

fairyclaire

I have £18k of student loan (taken out over 3 different courses all 1999 - 2000 onwards). I have some savings probably about half of this total and am confused as to whether I should use my savings to pay off some of my student loan. I recently received a statement and am paying quite a lot of interest. Any help gratefully received.
many thanks.

kerri_gt

fairyclaire wrote: »

I have £18k of student loan (taken out over 3 different courses all 1999 - 2000 onwards). I have some savings probably about half of this total and am confused as to whether I should use my savings to pay off some of my student loan. I recently received a statement and am paying quite a lot of interest. Any help gratefully received.
many thanks.

I am assuming then that these are income based loans like I had at uni - yes, I was a year 1 Guinea Pig when they introduced Income based loans. I was always advised not to pay any extra on my loan, basically because you will have to pay when earning £15k per/annum or over, but if your income drops below this, you will not have to make repayments until your income increases again. However, if you make overpayments/additional payments, you will not get these back and you might have needed your savings for something else.

On the other hand, I wish to god I didn't have the loan at all every time I see what is being taken off my pay cheque each month, esp when my two colleauges have a) paid off their loan as they also got a grant, b) the other didn't go to uni

Oldernotwiser

fairyclaire wrote: »

I have £18k of student loan (taken out over 3 different courses all 1999 - 2000 onwards). I have some savings probably about half of this total and am confused as to whether I should use my savings to pay off some of my student loan. I recently received a statement and am paying quite a lot of interest. Any help gratefully received.
many thanks.

Once you've used your savings for this you can never get them back, however much you might need them. In addition, you might , depending on your future situation, never need to pay it off at all. Personally, I wouldn't.

Poolie

HAMMYLIV wrote: »

Hi,

I received an interim statement from the Student Loans Company today. It states that my contributions from HM Revenue & Customs for tax year 06/04/2009-05/04/2010 are 0. However, from April-August last year I was in employment in a job where I was earning in excess of 15,000 a year. I made contributions to my student loan payment (totaling around £500) through PAYE. As I left the job in August over the full tax year I earned less than 15,000 but I still made those contributions from April-August.

Do I need to contact the inland revenue or the student loans company? Or am I likely to receive a refund for my payments as over the full year I earned less than 15,000? Why has £500 vanished!

As it says it is an interim statement, it means there is more information to follow. As you say you changed jobs or stopped working from August 2009 so there will be 2 records required for SLC before they issue your final statement. SLC will not entertain looking into missing repayments for 2009/2010 at present as they are receiving new repayments all the time.

If you have copies of your payslips you could write in requesting a below threshold refund and claim the £500 back. It will mess up your statements a bit and the interest but this will sort itself out later. If you do write in remember to confirm your bank details for fast payment.

Poolie

martmatt wrote: »

I've just read the "Should I repay my student loan?" article and have a question.

I have just recently received a pay rise and for the first time am over the repayment threshold so will have to start to repay in April.

I always imagined that when repayments are calculated it is dependant on the current interest rate of the year for the five years of the payments. Martin's article's maths splits it into simple 60ths.

The directgov website states:

"Monthly repayments are calculated on the basis of the total amount you borrowed. This is then adjusted according to the current student loan interest rate and divided by the total number of months over which you’re scheduled to make repayments.

I read this to mean that if I was to arrange to start repaying voluntarily before September I would effectively be freezing the loan at -0.4/0% percent and be immune from the hike to 4.4 % in September and subsequent hikes in the future, saving hundreds on a loan of £8500.

Is this a viable/permitted strategy?

Afraid it won't freeze your repayments at the current interest rate. Only the repayments you make voluntarily will be deducted at that rate.

It may nothave a huge effect on your monthly repayment. Once the new interest rate is confirmed (should be 4.4% for Pre 1998 loans) then the system will calculate your new monthly repayment amount for that year. As the interest rate changes each year so does your monthly repayment.