Do I pay off my student loan?

honest--jon

Hello, newbie to the forum.

I have been reading some stuff on here about paying back student loans. I am currently in my second going on third year at uni, I have calculated that I will be in aprox £11,000 of dept from student loan when I graduate.

I currently have about £13,000 of savings (all saved by myself not money from mummy or daddy)

I will be 21 when I graduate and am thinking it would be best to jump on the property ladder asap. Would it not be better to not pay off my loan and put the money towards buying a property rather than paying off the loan?

I was thinking its better to be paying into a mortgage rather than straight into a landlords pocket? Any advice would be great!

Descartes

You do not pay off a student loan like that, the money gets deducted as a percentage of any money you earn over a certain amount.

CMG_2

Descartes wrote:

You do not pay off a student loan like that, the money gets deducted as a percentage of any money you earn over a certain amount.

Yeah, but there is nothing to stop you paying it off in a lump sum.

I found myself in a similar situation. I put the loan in a high-interest/tax-free ISA. This way the interest outweighs the interest on the loan. I intend to invest the money from the ISA into a mortgage, in the hope that a house will always appreciate over 25 years quicker than the interest in the bank.

My sister decided to pay off her loan instead, so swings and roundabouts really!

littlemissmay

i would suggest that it is better to invest in property rather than pay it off immediately as what is the point in borrowing the money to start with? i mean, it seems more moneywise to use the money that you have got and investing..the interest charged to student loans in real terms is just a very small percentage that reflects inflation...

honest--jon

I think investing in property sounds better and more sense than paying off my student loan which is slowly deducted from my future wages.