A nice dilema!

chaffey

I was wondering if anyone could give me some advise.

In January I will be returning to Uni to start a two year MSc after having 18months away from education after my BSc. Due to a combination of working all the hours God sends, having very generous parents and losing relatives, I managed not to spend any on my student loan (£9000). This is now sitting in an ISA earning me interest as I don't need to pay it back yet.

With all the work I have been doing I will be starting my MSc with a healthy ammount of money in a savings account. I have done some rough workings and this will not be enough for the two years as I don't want to rely on my parents anymore (they should spend their money on themselfs!).

I have recenty been searching MSE to see what is best to do with regard to my finances over the next few years. I full expect to spend all my savings over the course of the MSc (thats what I saved it for anyway). I just want to minimise my future debt.

So would spending my saved student loan be better than going into an interest free overdraft on a student current account? Which money is better to spend/keep? Should I protect that student loans as it is the best loan I will ever have? Are there any other tips you would advise me in my current situation?

Sorry for the long post, any advise will be greatly recieved.

cupid_s

Will you not be funded for your MSc? Can you get funding so you don't spend all your savings? I got £9500 tax free for my 1 year full time masters course so it's worth trying

chaffey

Unfortunatly not, as it is a taught masters rather than a research based one. It is a MSc in Physiotherapy so it is basically a course for non-physio graduates who want to change direction and qualify as a Physio in two years rather than the normal three. A good thing is that the NHS pay my tuition fees so thats a £7000 saving there!

kittiwoz

I would say it is better to take out an interest free student overdraft. That way you are not paying interest on that borrowing and are acruing less interest on the student loan than you are collecting via the ISA. Then if the overdraft runs out you can still dip into the ISA but you'll have more in it than you would have done if you used it straight away because of the interest.

MSE_Martin

As a general rule (for the money savvy only)

If the cost of your borrowing is less than the after tax amount your savings pay you - maximise the cheap borrowing (dont overspend) and save the rest to earn interest.

That means in your case get the maximum student 0% borrowing while you can and at the end of it - repay it with the student loan money if needed

Martin