Repaying Student Loans 2009/10 guide discussion

drion

Hi, I began university in 2010 and now in my 5th year. I was wondering if I started being charged the 1.5% interest rate in 2010 (when I began) or does this only start when I graduate?

Any insight appreciated.

Ali

Helix

drion wrote: »

Hi, I began university in 2010 and now in my 5th year. I was wondering if I started being charged the 1.5% interest rate in 2010 (when I began) or does this only start when I graduate?

Any insight appreciated.

Ali

Starts from when you take out the loan not when you graduate, its all in the terms and conditions.

CaDepend

My student loan is the 1998-2011 type so the interest is the lower of the rate of inflation or the Bank of England base rate, plus 1%.

I have taken out student loans for the previous 3 years however I do not need the maintenance loan for my final year due to savings.

Should I take the loan as the interest is so low and put it in an account like the santander 123 which has a higher interest rate?

Lokolo

CaDepend wrote: »

My student loan is the 1998-2011 type so the interest is the lower of the rate of inflation or the Bank of England base rate, plus 1%.

I have taken out student loans for the previous 3 years however I do not need the maintenance loan for my final year due to savings.

Should I take the loan as the interest is so low and put it in an account like the santander 123 which has a higher interest rate?

It simple terms yes. The current interest rate is 0.9%. You could take out the maintenance loan. Get some interest. Pay it back and keep the different between 0.9% and whatever your interest rate is.

Or you keep it and use it as a house deposit which is what I did.

Barney321

Hi,

I'm part of the first year of students that graduated in June this year and has borrowed money under the latest student loan scheme. The amount I've borrowed is around £40k, and when I start paying back the loan in April I will be paying the highest interest rate of inflation + 3% on the loan and 9% of my salary above 21k. Since I have no other debts, is it in my interest to use my savings and any supplementary income I have to pay off the loan as quickly as possible, ahead of schedule and using lump sums, or will I be penalised for this?

Thanks a lot,

Barney

Stinkster

Hi

I'm after some advice please. I have 2 loans from 1994 & 1995 from a course I didn't complete, currently being deferred by Thesis each year.

The main query I have is that I've left my previous employed status and started a business on my own last August 2015. I haven't yet had to make a tax self assessment so I am not sure how to prove my earnings are below the threshold again. I believe my new sole trader run business has a turnover of roughly 50k with a projected profit of 26-27k.

Any advice for me, for the April 2016 deferment.

Thanks

pyrogenius

Hi, for various reasons I've been able to defer my original 90&91 loans and when I spoke to HSL this year they said it looks like they should be written off under the 25yr rule. However the agent said it would be up to their manager to authorise this. Has anyone else had this yet and if so how long do they take to authorise it?

There are thousands of these loans still out there so I am not alone.

Thanks.

nmtd

I think more work is needed on this article and especially your statement....

"Many students with spare cash who can afford to clear the debt or overpay ask this question, but in short for most students with post-1998 loans the answer is... No, No and No!"

Can you do an analysis of this SPECIFICALLY for 2012+ students and write copy to make it clear that its a very different story for them?

Reason 1: You can earn more saving than the loan costs

I can't see any accounts offering 3.9%+ (forecasted to increase in Sept 2016) on the kind of sums involved for these 2012+ students.

Reason 2: Avoid having to borrow back at higher rates

This again doesn't appear to be the case at the moment for the 2012+ student cohort.

Best personal loan rates at the moment are only 3.3% for up to £25k for 18+ years with only £10k+ income
Best mortgage rates at the moment for first time buyers with low deposit - 3year fixed 95% LTV at 2.79%

Reason 3: You can put the cash to better use

Using for a house deposit - well maybe this IS still a valid point if you are in that position.

Think about Help to Buy incentives on ISA's on your first £12k of savings to get the max £3k benefit, and 20% equity loans which are free for 5 years (but are very student loan-esque afterwards).

Then of course there is the Brexit effect where if you believe it, the Government and IMF doom-mongers forecast a house price crash. Whilst I doubt the likelihood of a crash whatever the referendum result - you might want to wait just in case. You might actually be able to afford a house if it does happen.

Overall, for 2012+ students - especially if they are going to go into a reasonably well paid career, they will end up paying significantly more than their headline amount over the 30 year lifetime of their loan. They therefore need to think hard about their approach to their student debt.

So for 2012 students instead of "No, No and No!" I think its a case of if you can, "Definitely Maybe".

silvercar

For post 2012 students the rate can be as low as 0.9% from the April after they finish studying.

nmtd

silvercar wrote: »

For post 2012 students the rate can be as low as 0.9% from the April after they finish studying.

Far too little information for such an 'esteemed' moneysaver

Lets make it simple for everyone should we...

For a 2012+ student, from the date you start studies (take out your year 1 loan the rate is RPI + 3%. In 2015 that equated to 3.9%, from Sept 2016 its forecast to be 4.6%. This rate lasts until the April after graduation - nearly 4 years for most, 5 years for those on a course with an industry year.

From April after graduation you pay RPI + 0 to 3% based on a sliding scale of salary from 21k to 41k (the scale now isn't going to rise as was first 'promised')

For a fairly typical student starting in Sept 2016, they will borrow £12600 in year 1, 2, 3 (Course Fee + Living Loan)

So by the time they graduate, at 4.6% the base loan will have increased from £37.8k to £43.2k (higher for 4 year courses) before they even start work.

Then the loan starts increase at the new RPI of 1.6% until they are earning £41k by which time it is back at 4.6% at current (historically low) figures.

Anyone with aspirations to be in this earnings bracket will pay back WAY more that their initial loan, so I re-iterate, think hard about it, and if you and your family are in the lucky position to afford it, paying back early could be the right thing for you.

I would like Martin Lewis and his team to make this scenario far more obvious in their article.