career development loan - payback

kk84

Hi, I'm 24 and I have a student loan of about £20,000 and also a £10,000 career development loan. I am about to finish my MSc course (in august) and have been very fortunate in securing myself with a permanent job that has an annual salary of £29,099. I need to move to a new city for this and because I have been a student for 5 years and the most I have ever earned is £14,000 in my year out, I'm really just wanting some advice regarding payback of the CDL.

The CDL payments are set to be £210.00 a month for 5 yrs. I was thinking that perhaps I should make payments of say, £400-500 a month instead for the first 6 months and then try to get a personal loan (with a lower rate of interest) to pay off the CDL completely, and then just have the personal loan (and minimum payments on the student loan) to pay off. Does anyone know if it's feasible that I could get a personal loan 6 months down the line? I know it depends on credit rating - I do have a credit card and don't really use it.

Thanks

jonesMUFCforever

If you can afford to overpay fine do it but don't over commit to repaying - now will be a very expensive time for you.

ViolaLass

What's the interest rate on your CDL?

paddyrg

You can't be certain you'll get a personal loan to consolidate with - remember if you still have £30k of loans outstanding you would need to be earning £120k to be allowed that much 'available credit', however briefly.

CLAPTON

what is the APR of the CDL?
whether its sensible to get a new loan to pay off the CDL may be depend upon the relative APRs

it would probably be better for you to build up some savings for a few months before overpaying so you have rainly day money

best to build up your credit rating by using the CC regularly for ordinary spending and pay in full each month; this will show on your credit reports as some-one with good credit handling capability

kk84

thanks, the APR is 9% I think - it is the cooperative CDL.

Zelie

You will find the post-uni years pretty expensive so you may not have enough aside each month to overpay initially. It's a good plan in general though. I was astonished by how much interest builds up on a CDL and after a year started to pay it off. I think it took me just over two years in all.

As for a loan, nobody can answer that as we don't really know your credit rating or lending criteria for the future. If you can, try to ensure you have a good credit rating. There are guides on the site to show you how to do that. If you currently have no other credit then you may want to try to build up a good rating with a credit card. From what I remember, CDL does not show on your credit files (I could be totally misremembering that so don't take it as gospel) so won't effect your rating.

malcolmffc

Your net monthly salary will initally only be about £1322 if you have a student loan, plus you should be looking to get a pension set up ASAP. I doubt you can afford to overpay the loan.