Dilemma-paying off my student loan

NottsCountyRule

For the last 3 years I have been paying off my student loan as a direct debit of £83 quid straight out of my current account. Previously I had deffered for a few years.

Next week I start back at Uni. I owe around £3000 and have taken out two £900 student loans to pay my tuition fees.

I have a deferement pack but now I'm not sure what to do. Do I defer payments whilst I am studying then start up again when I get a job or do I pay some off every month ie £25 just to chip away at it?

Is there any advantage of deferring then having it taken out off my wages in the future rather than straight out of my account?

freda

I've just called about my student loan, and was told that the APR is now only 2.4%.

Therefore, I am paying the min necessary from my salary, and have the rest set aside earning 5% in savings

Would suggest you do the same - put what you can afford into a savings account (in case the interest rate ever soars and you need to pay it off - highly unlikely, but I like to have the money there in case) and don't pay anything off the debt until you have to. That way, you get to keep the interest you earn.

Note that this is the ONLY debt (apart from 0% cards) that I would advise this approach!

AddieH

freda - I think your situation is slightly different as the OP has been paying back an "old style" pre-1998 loan by the sound of it?

NottsCountyRule, did you start your previous course prior to 1998 and graduate? And what subject and level are you studying now (Batchelors, Masters, Diploma?).

NottsCountyRule

AddieH

Yes I started my degree course in 1994 and graduated in 1997.

I am now studying a PGCE, I will finish June 2007.