Should i save/invest my student loan?

mona_2

Hi there!
I'm in the somewhat rare position of being a student who is in credit! I've never used my overdraft and have a p/t job, so I find that my student loan is largely untouched. As I'm now in my final year, I'm wondering I should really take advantage of the loan's low interest rate as well as the 0% overdraft to boost my savings. As I already have an ISA, my intention is to basically 'empty' my account, taking out my loan as well as my overdraft entitlement in order to start saving for my entry to 'the real world'. (I also recieved an inheritance to add to this savings fund.) I was just curious as to whether other users could give me advice as to whether or not I should do this!
Thanks!
Mona.

lellie

Yes. I do exactly that. Do it - now!

Voyager2002

If you can find a safe investment (eg savings account) that pays a higher interest rate, after tax, than the interest charged on the loan, then do it. The only downside that I can see is that if you find yourself needing to claim a means-tested benefit, the amount invested could count as capital and so prevent you from being eligible.

GoldenEye

Yes do it if you can! I worked part-time through College and University so I didn't need to spend a single penny of my student loan. If I eventually find a decent Graduate job that I will enjoy, I will use the money to pay for a deposit on a house.

Because the rate of interest is low, an ISA will pay more on your student loan (ignoring inflation of course).