Student Debt v Inheritance

asdaprice

Hi
Advice welcome on best option for student with many £Ks debt (all student loan type) who has inherited an amount roughly equal to the debt

Pay it off and start at zero? Invest inheritance? Defer paying debt off until deducted from salary (salary some years off) ? Other?

llh189

my advice is ( and will probably get me in to loads of trouble but ), your student loan is probably the best deal that you will ever get, so use the money very wisely on something else, a house deposit for example, don;t use it on faddy things, holidays or clothes but use it to make a real difference to your life. Then get a good job and pay off the loan, my only advice to paying of the loan would be if you could trust yourself to save a decent amount each month to get yourself a house etc.

HTH

Lisa

kathfisch

Unless there's a danger that you'll waste the money - don't pay off the loan! A top savings account or other investment will pay a higher rate of interest that you're paying on your student loan. So you will earn more in interest than the interest being added to your loan = profit!!!

When you are due to start repayments simply transfer a small amount each month from your savings (or not if you can afford it!).

The most important thing, though, is to make sure you stay in this positive situation. If there's a danger you might be tempted to spend the money then use it to pay off the loan (you can't reclaim any overpayments) or stick it in some hard to get at investment, fixed term or something. That would make it hard to get out small bits as and when to cover repayments though, if you needed to.

kathfisch

Ooh, *found this and thought of you* :rotfl:

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1157645184,28030

frugglewump

I know someone in the same position who paid off their student loans. They are now kicking themselves as the have a £4k loan and £5k on CCs which could have been much reduced. Especially since they don't earn enough to have to repay the student loans yet.