If My Pennies Were Pounds...

Kepp

If_My_Pennies_Were_Pounds wrote: »

Yeah Becs it is a possibility, to be honest I would love to not have to, but if it means I reach my goal it wouldn't be a problem because the £51 a month that currently goes to the loan could then go back in to savings.

The money my sister owes me currently goes in to a separate account than my current account (but not in the ISA either), the last lot of her payments went towards my car insurance, but from now on I will put them against the loan - obviously can't determine how many payments there will be though.

There is a small amount sitting in that account (£150) that I think I will gradually pay off to the loan, don't want to pay it all at once incase something crops up, is that the wrong frame of mind to be in?

I think if it was me I wouldn't pay all the savings off the loan straight away as like you say something could crop up.

If you had high interest levels on your debt I would say pay the lot off now but as far as I understand with student loans that's not the case.

I would keep saving as hard as you can, put what you can towards the loan when you can afford it, and then use your savings to wipe out whatever is left on the loan in April.

You can then start saving hard again after that to build your savings back up.

Think that would be worth it to not have to go into the new tax year with the loan and potentially have to put your debt free date into 2012!

If_My_Pennies_Were_Pounds

So you think it's ok to keep that £150 in the account for now, or would you recommend starting to pay the loan in small chunks with it?

I really don't want to touch my ISA, which is where my VSP goes to, if possible because like I've said I am trying to build up some savings too.

Sorry guys, this stuff probably seems like a no brainer to you!

Kepp

Woowoo wrote: »

I think it's ok to keep it in savings and then put it towards the loan at the end before you go into the next tax year if you need to.

i think I need to learn to summarise - you put my ramblings into one sentence! :rotfl:

Kepp

If_My_Pennies_Were_Pounds wrote: »

So you think it's ok to keep that £150 in the account for now, or would you recommend starting to pay the loan in small chunks with it?

I really don't want to touch my ISA, which is where my VSP goes to, if possible because like I've said I am trying to build up some savings too.

Sorry guys, this stuff probably seems like a no brainer to you!

What is the interest on the loan currently?

If_My_Pennies_Were_Pounds

My next task then would be to catch it in time to ensure that HMRC don't take any extra payments for my loan at the start of the next tax year.

I think I would need to phone them about the end of January/beginning of February to ensure that it isn't too late. You know what HMRC can be like about issuing rebates and they'd no doubt say it's my fault for not informing them earlier...

Woowoo

I'm not good with this stuff really Pennies, but why not build up a small cushion of say £300 in case of emergencies and then put anything else towards the loan.

Like Bec's said your interest rate is low and if you feel more comfortable having some savings this would be a good compromise.

If_My_Pennies_Were_Pounds

beccie wrote: »

What is the interest on the loan currently?

To be honest I don't know I haven't had anything to say that interest is changing. I had the loan in 2007/2008 for my college course and since then it's maybe earned £1 a month interest...not sure if that is set to change though?

Kepp

If that's all the interest it's incurring at the moment, I would stop making overpayments and just out everything you've got into your savings.

Then you've got the safety net you want.

But I would def use all those savings if needs be to wipe the loan out in April, especially if interest rates are set to rise.

Ultimately though you have to do what you are comfortable with and whatever spurs you on the most to stick with this

If_My_Pennies_Were_Pounds

I think I would like to see the balance going down gradually as opposed to paying it all in one chunk, I think it spurs me on more to see that it's actually doing something!

I think interest will be rising soon (if it hasn't already!) so ideally I should try to blitz it! I'm eager to get to the stage of being debt free.

I thought about a payment a day, but to the loan you can only do a minimum of £5 per payment and I can't afford that daily, maybe I'll transfer the odds on my current account daily into the other account (will call that loan payments from now on) and then transfer it when it's over the threshold?

If_My_Pennies_Were_Pounds

I am SO stupid! The loan payment account I have been talking about that currently has £150 in it? Well stupid me has a standing order from my current account set up to that for £50 a month in order to boost savings...

That standing order has now been cancelled and I will pay it off the loan each month instead. That now leaves me with £40 a month overpayments which is much more manageable and perfectly doable!

:j:j:j:j:j