Student Loan repayment

cococoladebt

I am about to start earning some money and would like to know if it is illegal if I instruct my employer not to deduct my salary for student loan payment but I make payments myself???

Mankysteve

The question is why would want to pay it yourself?

If your earning over 15k then from my understanding it like paying tax its automatic and they will only let you pay it yourself if your self employed.

cococoladebt

Mankysteve wrote: »

The question is why would want to pay it yourself?

If your earning over 15k then from my understanding it like paying tax its automatic and they will only let you pay it yourself if your self employed.

Thanks for clearing that up.

Paying it myself = higher repayments.

anna42hmr

cococoladebt wrote: »

Thanks for clearing that up.

Paying it myself = higher repayments.

you can make additional payments yourself (either via direct debit, standing order, cheque or online payment) which doesnt affect how much is taken via payrole, (HMRC tell the employers to deduct

you may find this helpful http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,3866890&_dad=portal&_schema=PORTAL

cococoladebt

Thank you.

anna42hmr

cococoladebt wrote: »

Thank you.

no problem, i have decided to pay extra off mine too, via direct debit, as i want rid of it, and reduce the amount of interest i will pay on it when the rates go up in september

Oldernotwiser

Paying more off your loan than you need to isn't very sensible. Once payments are made you cannot ever get them back, regardless of how your situation may change.

Read Martin's article on the subject if you don't understand this.

anna42hmr

Oldernotwiser wrote: »

Paying more off your loan than you need to isn't very sensible. Once payments are made you cannot ever get them back, regardless of how your situation may change.

Read Martin's article on the subject if you don't understand this.

very true but there are others arguing the both sides

for instance, i am paying only what i have spare (have no debts, and have savings and still adding into those savings, so additional contributions is not going to take over from this) not to mention that inflation means that savings are worth less, (as some are suggesting now that to even match inflation, you need to earn over 4%.

also given the amount i have left to pay on student loans, at the rate i am paying back via payrole will be paid in 4 years time, so cant see that 1. that no matter who gets in during the general election that they will abolish old loans in that time (if any do get rid of them, i doubt it would be for a while because of the economy, and if they do will probably phase it in, ie no loans for new students etc)

and also will end up paying it off before it would reach the time it would be written off (60 years old for my student loan) so if i can afford to pay more, i may as well, as i will end up paying it any way and will reduce how much interest i pay (especially if indeed it does jump to over 4% interest in september)

cococoladebt

debt is debt. I don't want the burden of having a huge debt over me. Having said that, of course I would over pay my credit cards which charge 15% interest first. :eek::eek::eek::eek:. Current interest rate for student loan is 0% - so no need to overpay any way.

Oldernotwiser

cococoladebt wrote: »

debt is debt. I don't want the burden of having a huge debt over me.

But debt tha tmay never need to be paid off is hardly debt at all.

anna42hmr

Oldernotwiser wrote: »

But debt tha tmay never need to be paid off is hardly debt at all.

the way i veiw it is debt is a debt, just because its paid to the government and is cheap, doesnt mean that it is not a debt

i doubt that many never have to pay it off though

any one who started uni after 1998 have the income based loans which are only written off if:

you are 65 (if loan before 2006)
25 years after the loan should have started to be paid back (if loan 2006 or later)
you die before the loan is paid back
you never earn more than £15,000 (which i imagine, eventually most former students will earn more than that)

so in my case, i know i will end up paying it back so may as well increase payments whilst i can 1. afford it, 2. reduce the balence before the interest rates go up in august and therefore reduce the balence that they can charge interest on.