student loan + £10k! what to do!?!?!?

freak_in_cage

Hi. would appreciate ppls advice on this. i have read around the subject so will come up with an action plan:

i have a £12k student loan. current interest rate is around 2.5% i believe. i need to confirm this, and will do so soon.

i have not yet started playing back my student loan (i am definatly above income required). however, this isn;t something im gonna try and start paying back, will wait for them to catch me up!

i dont have an ISA this year

i have recently inherited £13k

THE PLAN:

1) Place £3k in NS&i direct ISA at 5.3%

2) Place £10k into Icelandic bank Landsbanki Icesave account @ 5.2%

3) Place £500 into Lloyds TSB’s Monthly Saver @ 8%

4) Place further £250/month into Lloyds TSB’s Monthly Saver @ 8%

5) April 07 Transfer £3k from Icesave into new ISA

would apreciate ppls opinions on whether the above is the best use of the money, along with any clever ppl to number crunch and see if all this hastle is better than just paying off my student loan!!!!!

Edit- (i have £13k savings, not £10k!!)

kendra_2

From first inspection, sounds like a sound financial plan.

There was a front page article with regards to this:
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1157645184,28030,

Meatballs

Sounds good, you will make more money than paying back the loan. Perhaps another Monthly Saver might net you more interest overall if they allow higher payments/starting amount than Lloyds £250. Just a thought, not looked into it.

Also you could put 4k into a stocks isa if you are willing to invest that way?

freak_in_cage

Meatballs wrote:

Sounds good, you will make more money than paying back the loan. Perhaps another Monthly Saver might net you more interest overall if they allow higher payments/starting amount than Lloyds £250. Just a thought, not looked into it.

hey thats a good idea, so open up 2 monthly saver accounts!!! thx m8

so 13k, -6k for ISAs (for next few years) = 7k

so thats 3 1/2 k for each saver account. assuming 500 deposit, and up to 250/month, that will last me 1 years depositing money into each account!!!!

can i open up 2 llyods monthly saver accounts?

if not, whats the next best one????

techno_geek

HSBC also do an 8% regular saver account which operates over 1 year (compared to the 2 years with Lloyds TSB).

However, you have to have an account with them and credit your salary to it...

Mikeyorks

freak_in_cage wrote:

Edit- (i have £13k savings, not £10k!!)

Yes .. between the heading and the accumulations in the body of your post ...... I was hoping you hadn't been studying Maths.;)

I'll leave others to comment on the distribution of whichever figure you have in Savings ... but better to keep the money, as you seem to be facing in the right direction (I would advise my son differently :rolleyes: .... £13k in the hand .... would soon be frittered away). Rather than pay the SLC early.

A long route to saying the interest rate is :-

The amount you have to pay back will depend on the amount borrowed plus the interest charged. Interest is linked to the rate of inflation and is adjusted each year in line with the Retail Prices Index (RPI). For the year from 1 September 2005 this will be 3.2%. From 1 September 2006 to 31 August 2007 this will be adjusted to 2.4%

Historic APR's to the right of the table immediately below the interest text on here :-

http://www.slc.co.uk/noframe/corpinfo/factfig.html

ashm1

Hi,

Have you still got the interest free overdraft student current account ? (I had £1000) Make sure you find out the date at which your student current account switches to a 'normal' current account!


Kind regards,

Ashley.

freak_in_cage

ashm1 wrote:

Hi,

Have you still got the interest free overdraft student current account ? (I had £1000) Make sure you find out the date at which your student current account switches to a 'normal' current account!


Kind regards,

Ashley.

good point, yes i do. im currently £1000 overdrawn, interest free, although i think your right, it doeschange soon! had better look into that!!! thx


techno_geek- the HSBC looks ok, although there are no penaltys for missed payments with lloyds so doesn;t matter if the funds slow after this, i can put £25/month from my salary into them to keep them active and then use another ISA.

awesome, thx for your help ppl. i will look at that site Mikeyorks and work out what im benefiting from all this!

freak_in_cage

how about the 12% A & L account???? would this be better than the 8% lloyds??

OllieLong

The Lloyds one is over two years though compared to the one year of A&L.

Limes

OllieLong wrote:

The Lloyds one is over two years though compared to the one year of A&L.

Noticed today Britannia have a 1 year regular saver at 7.50% with no need to sign up to a current account!