Should I Pay My Student Loan

dave82_2

I second or should that be third the above sentiment.

Having just taken out finance on a kitchen at the exact same time as I finished paying my student loan it has been fantastic as I am not missing the money I never had. I am actually £10 better off a month!

If I had to pay the loan and the kitchen I wouldn't be happy! Also the kitchen payments stay the same when I get a pay rise the student loan repayments would have gone up!

k984942

Apples2 wrote: »

I can absolutely categorically assure you that every single pay rise you ever receive will not be enough to make you think, "I'll give up this pay rise and repay my Student Loan".

I acknowledge your sentiment, but at what Salary are you going to decide to repay it?

telboyo got it right in his reply, you will NEVER have more free money in your pocket than you have right now, as time goes by, your commitments increase leaving you with less each time you go up the ladder.

Fair point about the pay rise issue. Thanks

I am really beginning to think I should get started now, so am going to call the SLC and find out how much I owe and figure out what the monthly will be.

Marvel1

Just to give you an idea of how much you would pay, I'm on £18,000 a year, and on basic pay they take £22 a month. Viewing my payslip I have paid a total of £522.00 from April 10 - March 11.

For the last 4 years it's been various amounts as I did loads of overtime, and now it has stopped since November so it will be £22 a month. I don't really notice or miss it.

I was thinking of paying a lump sum off it, until I read the article on this site.

Stuart_W

k984942 wrote: »

I am really beginning to think I should get started now, so am going to call the SLC and find out how much I owe and figure out what the monthly will be.

A good way to look at it if you want to follow the advice from others about clearing your debt. Because SLC take being rubbish at admin to new heights, this is what I would suggest -

Use the current student loan formula to work out what you should be repaying - so take your annual gross salary, minus £15,000 and then multiply the answer by 0.09. Then divide this by 12 for your monthly repayment. It works out at £7.50 per month for every £1,000 you earn over £15,000. (a £15,000 salary has repayments of £0.00 per month, a £16,000 salary of £7.50 a month).

Each month that your payslip confirms that a repayment isn't made, as soon as you've received your pay, use the SLC website to make a one-off debit card payment.

Eventually, they'll start taking deductions automatically so you won't need to make the payment each month. This is the easiest way to make sure they are paid in the mean time.

eg - annual salary £20,000
take of first £15k = £5,000
£5,000 x 0.09 = £450
£450 / 12 = £37.50 monthly repayment
(a £25k salary is £75 a month, a £30k salary is £117.50 a month)

Hope this helps.
:-)

Poolie

Stuart_W wrote: »

Use the current student loan formula to work out what you should be repaying - so take your annual gross salary, minus £15,000 and then multiply the answer by 0.09. Then divide this by 12 for your monthly repayment. It works out at £7.50 per month for every £1,000 you earn over £15,000. (a £15,000 salary has repayments of £0.00 per month, a £16,000 salary of £7.50 a month).


eg - annual salary £20,000
take of first £15k = £5,000
£5,000 x 0.09 = £450
£450 / 12 = £37.50 monthly repayment
(a £25k salary is £75 a month, a £30k salary is £117.50 a month)

First off Student Loans only take round amounts. So on a £16k salary monthly repayments would be £7 per month not £7.50.

The calculation is wrong as the £450/12 = £37.50, but the deduction would only be £37 as this is always rounded down.

andy.m_2

so the op would overpay by 50p a month.

hardly a show stopper now is it.....


OP well done on starting to repay. I remember repaying mine and the feeling of satisfaction once complete.