Repaying Student Loans 2009/10 guide discussion

JoMoney

Is the Student Loan interest rate quoted as an APR or nominal rate?

In the terms and conditions, it states, "We calculate the interest daily and apply it to your balance each month – this is known as ‘compound interest’", though I don't believe this give us enough information.

On a related note, what is the effect of payments being made only once a year by HMRC to SLC? Is it possible to factor this in, to give a comparison of the cost of a student loan and a "standard" fixed rate loan, or more likely, the amount of interest that the money would earn in a savings account?

[I have a pre-2012 loan, which is likely to be paid off eventually]

overseasrepayer

Hey all, 
I read the guide to repaying but I'm wondering if I have a bit of unique case.

• I have a plan 1 (post-1998, started uni in '09) loan with about 6K left to pay (1.75% interest rate)
• I'm located abroad, so I have a direct standing order every month as I'm not in the UK paye system. I pay back 570 euros (roughly £500 but fluctuates based on exchange rate) per month. 
• Aside from this student loan, I don't have any other debt. Nor am I saving for a house or other large purchase of this.
• In the country I'm located, interest on savings accounts is incredibly low, so I wouldn't have much to gain when it comes to getting interest off my money.
• However, I do have approximately 7K in savings at this time. 

I'm considering using either 6K of my savings to pay off the whole loan or putting a significant portion down (i.e - clearly at least 50%), so that I can free up this 570 EUR (£500) monthly payment immediately or be done paying quicker. It would allow me to increase the amount I put into savings, allowing me to re-build it pretty fast and meet my future savings goals even more quickly.

However, given that at the rate I'm currently paying my loan, it will be done within 9-10 months anyway. On the other hand, I wonder if it'd be best to pay a lump sum, be debt free and more quickly put more money towards savings. The only concern I have is that it doesn't feel great to have a lower amount of savings since it'd leave more more at risk if an emergency pops up.

Any thoughts on this would be appreciated. Thank you!

Becksf

HI 
I have a student loan only for around a 1000 pounds and have just started to receive universal credit due to a change in circumstances . The UC i receive pushes my income over the threshold for repayments , is UC included in student loan repayment calculations as you only relieve it if you are on a low income so it seems like a contradiction that once you hit a low enough threshold to receive UC you then also hit a threshold to have to pay back your student loan . Does anyone know what the rules are regarding this?
Many Thanks

Ed-1

Becksf said:

HI 
I have a student loan only for around a 1000 pounds and have just started to receive universal credit due to a change in circumstances . The UC i receive pushes my income over the threshold for repayments , is UC included in student loan repayment calculations as you only relieve it if you are on a low income so it seems like a contradiction that once you hit a low enough threshold to receive UC you then also hit a threshold to have to pay back your student loan . Does anyone know what the rules are regarding this?
Many Thanks

No. Universal credit is not taxable income and in any case, you only make student loan repayments on income from employment unless you fill out a tax return.

sigilb

I left the UK in Feb 2014.
Came back due to coronavirus and hopefully will be working in UK later this year. That will be over 6 years with a break in student loan payments. Will I still be liable to repaying the student loan when I begin working again? (Assuming my salary exceeds the minimum amount of course).

JayRitchie

sigilb said:

I left the UK in Feb 2014.
Came back due to coronavirus and hopefully will be working in UK later this year. That will be over 6 years with a break in student loan payments. Will I still be liable to repaying the student loan when I begin working again? (Assuming my salary exceeds the minimum amount of course).

Yes. Were you liable to repay while you were overseas? If so it may be worth finding out whether you will be chased for arrears.

sigilb

JayRitchie said:

sigilb said:

I left the UK in Feb 2014.
Came back due to coronavirus and hopefully will be working in UK later this year. That will be over 6 years with a break in student loan payments. Will I still be liable to repaying the student loan when I begin working again? (Assuming my salary exceeds the minimum amount of course).

Yes. Were you liable to repay while you were overseas? If so it may be worth finding out whether you will be chased for arrears.

What about this 6 years statute barred stuff?

inspectorperez

It is quite possible is it not that the OP's loan is no longer owned by Student Loan Company? The government have made at least one sale of a tranche of student loan debt to remove it from the country's balance sheet. Not sure how the OP would find that out without really sticking one's head over the parapet as it were. I know one thing for definite from own experiences involving my own children, Student Loan Company are not noted for coherent or timeous communications!

JayRitchie

sigilb said:

JayRitchie said:

sigilb said:

I left the UK in Feb 2014.
Came back due to coronavirus and hopefully will be working in UK later this year. That will be over 6 years with a break in student loan payments. Will I still be liable to repaying the student loan when I begin working again? (Assuming my salary exceeds the minimum amount of course).

Yes. Were you liable to repay while you were overseas? If so it may be worth finding out whether you will be chased for arrears.

What about this 6 years statute barred stuff?

I dont think it applies for student loans. You could try asking on the debt free wannabe board.

sigilb

JayRitchie said:

sigilb said:

JayRitchie said:

sigilb said:

I left the UK in Feb 2014.
Came back due to coronavirus and hopefully will be working in UK later this year. That will be over 6 years with a break in student loan payments. Will I still be liable to repaying the student loan when I begin working again? (Assuming my salary exceeds the minimum amount of course).

Yes. Were you liable to repay while you were overseas? If so it may be worth finding out whether you will be chased for arrears.

What about this 6 years statute barred stuff?

I dont think it applies for student loans. You could try asking on the debt free wannabe board.

Where would I find this board?