Worth paying back student loan?

Linguistic_Chimp

tr3mor wrote:

You'd pay it off even quicker if you used the entire of your 0% cards and put them in a high interest savings account.

Thanks for the advice. I was aware of the possibility of doing this, but if I do do this, I will:
a) be tempted not use the money to pay off my student loan
and
b) while the 0% interest money sits in a high interest account, the interest would still be compounding on my student loan.

I'm not ruling out your advice definitely, but I don't see how it would help me pay off my loan quicker necessarily.:undecided

tr3mor

Linguistic_Chimp wrote:

b) while the 0% interest money sits in a high interest account, the interest would still be compounding on my student loan.

But the interest would be compounding at a faster rate in your savings.

put £100 in a 5% savings account make £5.

take £100 off your 3% student loan save £3.

If you chose to pay off your student loan on 0% cards, when/if the 0% offers come to an end, or something happens with work or similar and you can't get more 0% credit you'll end up owing loads to the credit card company.

If you put the money in savings and didn't touch it and were in the same situation you'd be able to pay the CCs straight back.

angeldeelite

this has been getting on my nerves for months!

i spent 5 years at uni getting the full loan each time so when i graduated i owed around 18-19k.
since graduating last year i've not earned over the threshold so not made any payments. I got my statement a couple of months ago - they are adding on £50 a month interest!!!!!!
therefore in 2 years its gone up another grand!
i've recently started a new job so my repayments will be £90 a year - yet they'll charge me £600 a year in interest.
i called them and asked if they were aware of this and they said yes but its not a problem. you still only pay £90 a year. i dont know whether to forget it and accept the fact i will never pay off my debt or should i take this to somebody. it seems a bit outrageous.
i've checked a few mortgage places and they dont take your student loan into consideration (just the monthly payment which is peanuts!)

going2die_rich

Don't want to seem arrogrant, BUT... you all recieve yearly statements of your student loan and the interest being charged from Day 1. So why would you pressume no interest would be charged when you leave uni and get a job under £15k?

It's at inflation rate so although it'll seem more, when comparing it to now, it's actually the same amount you borrowed. If your working and earning more than £15k you wont really see it as it's a small percentage of your wage.

I wouldn't pay any extra on what you have to as you'd make more from putting that extra in a high saving interest account.

angeldeelite

it just all seems a bit pointless when the interest they charge you is more than the repayments they take! by £500 quid a year!

but i'm happy if they're happy, this debt will NEVER be paid off

tr3mor

angeldeelite wrote:

it just all seems a bit pointless when the interest they charge you is more than the repayments they take! by £500 quid a year!

but i'm happy if they're happy, this debt will NEVER be paid off

Well, it also seems a bit pointless that you've spent £18-19k going to Uni, then to not get a job with a wage that justifies that expense!

Linguistic_Chimp

tr3mor wrote:

If you chose to pay off your student loan on 0% cards, when/if the 0% offers come to an end, or something happens with work or similar and you can't get more 0% credit you'll end up owing loads to the credit card company.

If you put the money in savings and didn't touch it and were in the same situation you'd be able to pay the CCs straight back.

Yeah that is what worries me mainly. Perhaps I'll go down the high interest route then and try to avoid looking at my Annual Statements from the SLC.

Linguistic_Chimp

tr3mor wrote:

Well, it also seems a bit pointless that you've spent £18-19k going to Uni, then to not get a job with a wage that justifies that expense!

Just wanted to stand up for angeldeelite - getting my job at 30,000/year was a total fluke, I practically got headhunted by the EU and am now a civil servant in the EU institutions in Brussels. My student friends, who have similar sized student loans, and the same degree as me, albeit different language combinations, have had to fight for 2 years to get a wage above the threshold.
Getting a degree doesn't necessarily get you a well paid job anymore at all. Also not everyone does a degree in order to get a well paid job - I studied because I like studying, learning and enjoy the subject. It had nothing to do with getting a job.

Linguistic_Chimp

Hi angeldeelite,
Just wanted to show my solidarity with your feelings. People say that the loan is just the same amount of money as you pay it back since the interest rate is in line with inflation, and whilst that is financially factually the case, it certainly doesn't feel like it at the time. I fact makes me look a bit like this when I get my Annual statement through: :eek:

angeldeelite

tr3mor wrote:

Well, it also seems a bit pointless that you've spent £18-19k going to Uni, then to not get a job with a wage that justifies that expense!

if you read it again i only graduated last year. if they expect me to be earning 25k a year already (which is what i'd need to be earning to cover the £600 interest) then they are sadly mistaken because i didnt do anything medical or particularly skillful like engineering. plus i came from a single parent family with not a lot of money and therefore needed that amount to see me through the years.

I am earning over the threshold now but nowhere near enough to cover what they charge me in interest each year. i'll happily pay my minimum monthly payments they take off me but hope they realise this debt will never be repayed in full