Student Loan Debt

mirko

redpete wrote: »

If and when you want to apply for a mortgage or car loans etc. the lenders do not treat student loan debts in the same way as they would other debts when looking at your creditworthiness. Why should you not treat it the same way that they do?

When I applied for a mortgage in 2001 I totally forgot to mention my student loan.

When I went in at a later date to point this out (before I took on the mortgage) my advisor said "Oh! Don't worry about that, we don't count student loans at all!"

That was 2001 though, when any man (or dog) could get a huge mortgage if they fancied one!

MilneBay

Don't even think about paying off the student loan

As others have said, it is not the same as normal debt (not a burden if you lose your job/ retire) and if your salary rises so that you go over the threshold then you'll have the money to afford the repayments.

Make your money work much harder. What is your mortgage interest rate? If it is higher than the best savings account available then overpay (unless you need an emergency fund for security). Most lenders will let you overpay by at least 10% a year and it could knock tens of thousands off the total you repay. Go and look at the MFW board for inspiration and you'll be hooked!

The student loan is not a priority - if it's only psychological then think of the mortgage as the priority debt as that still needs paying whether you lose your job or retire. MB

mariemcg

redpete wrote: »

If they think that then they don't understand student loans either. These are set up as an alternative to grants that those of us old enough were fortunate to receive, we never had to pay these back at all. The Government has decided how much and under what circumstances the student loan should be paid back, it's not you avoiding the issue or being less than responsible. You say they don't 'do' debt - have they never had a mortgage? If not they are unusual and fortunate.

If and when you want to apply for a mortgage or car loans etc. the lenders do not treat student loan debts in the same way as they would other debts when looking at your creditworthiness. Why should you not treat it the same way that they do?

Ha! Being an "old style" student (pre 97) I got a grant too (and had a job) but still applied for the maximum loan. Please don't judge me, I was young, naive and under the impression that I was going to land a fabulous job.....

Anyway, my inlaws had a mortgage (not any more) but paid a huge deposit and have no other debt. Oh and they were able to put their children (my husband and sister in law) through uni so they had no need to work during term time or get student loans..

They have now paid off their mortage and are both taking early retirement. How the other half live, eh?

mariemcg

I had already asked the Student Loans Company to resend the statement they sent me in September. My husband opened the letter and has had a fit!
He knew I had student loans but had not realised how much the loans were. Then, imagine our horror when we read that as from September last year the interest rate had changed and would now be 4.4% :eek:
Don't they want us to pay them off???

Husband is now instisting that I pay them off ASAP and basically "throw" as much money per month as possible. Oh well. Looks like I could become a regular on here.....

niccatw

mariemcg wrote: »

I had already asked the Student Loans Company to resend the statement they sent me in September. My husband opened the letter and has had a fit!
He knew I had student loans but had not realised how much the loans were. Then, imagine our horror when we read that as from September last year the interest rate had changed and would now be 4.4% :eek:
Don't they want us to pay them off???

Husband is now instisting that I pay them off ASAP and basically "throw" as much money per month as possible. Oh well. Looks like I could become a regular on here.....

Show him this thread. As every-one has said, it's not the same as other debt.

MilneBay wrote: »

Don't even think about paying off the student loan

As others have said, it is not the same as normal debt (not a burden if you lose your job/ retire) and if your salary rises so that you go over the threshold then you'll have the money to afford the repayments.

Make your money work much harder. What is your mortgage interest rate? If it is higher than the best savings account available then overpay (unless you need an emergency fund for security). Most lenders will let you overpay by at least 10% a year and it could knock tens of thousands off the total you repay. Go and look at the MFW board for inspiration and you'll be hooked!

The student loan is not a priority - if it's only psychological then think of the mortgage as the priority debt as that still needs paying whether you lose your job or retire. MB

Sharon87 wrote: »

Don't worry too much about student loan, if you've got a mortgage that you can overpay I'd recommend that (especially if moving to bigger house). It'll save you money in the long run.

Don't worry if you don't pay student loan off by the time you retire you don't have to pay it back!

I've only paid £72 off my student loan, graduated 2.5 years ago. I'll only pay it if I had to or had loads of savings and no debts.

What's the interest rate on your mortgage? If it's anywhere near close, then you'll be better off to "basically "throw" as much money per month as possible" at that. You could always set up a wee standing order to the student loans if it'll make you feel better.

Either way, you've done amazingly! Don't beat yourself up about it! I'm still paying off two sets of student loans (both kinds) and it does grate that one will take ages to clear, but I hope to leave it ticking over (I do earn just over the threshold) and overpay the mortgage when it gets to that time.

t4mof

mariemcg wrote: »

Ha! Being an "old style" student (pre 97) I got a grant too (and had a job) but still applied for the maximum loan. Please don't judge me, I was young, naive and under the impression that I was going to land a fabulous job.....

Me too! I had a grant that covered my accommodation fees, a job that paid for living and I took out my full student loan entitlement... which I saved until my 3rd year and then used to go on a student exchange to the USA. I graduated in 1998 and still haven't paid a penny towards my student loan.

I will probably pay it back, just so it isn't hanging over me and I can honestly claim to be debt free one day but nothing will be paid towards them until the credit card debt has gone, and the loan from my in-laws... and you only have to look below to see how much I've yet to pay off those debts :rotfl:

mariemcg

niccatw wrote: »

Show him this thread. As every-one has said, it's not the same as other debt..

I would never show him my ramblings - he is totally against forums etc anyway and I kind of prefer to keep some things private. I find talking about money difficult and it's easier to do it online somehow....

My husband does know that it is a different kind of loan but he would be happier if it didn't exist at all. (So would I!) He has basically asked me to keep paying what I was paying my credit cards towards my student loans to reduce them-we are both shocked at the interest rate - and also put some money aside if possible. Going to have to tighten my belt. Just when I thought that I had made good progress....:rotfl:

mariemcg

[QUOTE=What's_the_interest_rate_on_your_mortgage?_[/QUOTE]

Not sure off the top of my head but it's at least 1% less than the 4.4% that the student loans company have started charging....

redpete

mariemcg wrote: »

Ha! Being an "old style" student (pre 97) I got a grant too (and had a job) but still applied for the maximum loan. Please don't judge me, I was young, naive and under the impression that I was going to land a fabulous job....

Call that old-style! I speak as a pre 82 student when student loans hadn't been invented, we had coal for breakfast, crawled over broken glass at 4:30 am to get to lectures which went on till 10:00pm then started a 12 hr shift mopping up grease at Wimpys to pay for the coal...

Anyhow, no judging here for taking the max loan, although slightly different (graduating this year) I encouraged my son to take the max loan possible because it's cheap money on which he could earn more in a savings account than he would pay in interest.

mariemcg

redpete wrote: »

Call that old-style! I speak as a pre 82 student when student loans hadn't been invented, we had coal for breakfast, crawled over broken glass at 4:30 am to get to lectures which went on till 10:00pm then started a 12 hr shift mopping up grease at Wimpys to pay for the coal....

:rotfl::rotfl::rotfl::rotfl: