repay student loan when working abroad and due to finance crisis

epiphone_2

Hi, Im living and working in Germany for 7 years now and sending money back home for the monthly repayments. Typically I cant get on the SLC website today, tells me that the account info is unavailable.

Im paying the highest monthly repayments cos its based on my gross, which is big in Germany, cos getting taxed 50%. (another discussion. I complained about this, but the response was basically, tough luck!) Anyway, I can afford to pay high repayments.

Considering that Im getting paid in euros and have a debt in pounds (my only debt) and considering the finance crisis, if either pound or euro goes belly up, should I consider paying off my student loan in full now? Also taking into account that I have the savings (euros) to pay off student loan, just sitting in my bank account.

Some people might say, the Euro wont be allowed to fail, but you never know. I would be getting paid and living in a failed currency, with savings also deminished. Which would be fine for living, but then the debt in pounds might hurt me.

Thanks, Epi

atypical

epiphone wrote: »

Considering that Im getting paid in euros and have a debt in pounds (my only debt) and considering the finance crisis, if either pound or euro goes belly up, should I consider paying off my student loan in full now? Also taking into account that I have the savings (euros) to pay off student loan, just sitting in my bank account.

This is a complicated question that no one will be able to answer definitively.

Is having the money in a savings account beneficial to you versus paying off the loan at 1.5%? What are you earning in the savings account? And how likely are you to need the money in the future?

Say for example you were earning 3% in savings, that leaves you a 1.5% 'profit'. But that could easily be wiped out after tax and through exchange rate fluctuations.

Opinions on whether the Euro or pound will devalue or just that - only opinions. I don't think they would be very helpful in your decision. You could for example consider the possibility that the Euro collapses and Germany goes back to the Deutche Mark which is likely to be a stronger currency than the pound which would be in your favour. But it's all speculation and guesswork!

melancholly

tough one to call. so much depends on your finances. it certainly can be difficult when other parts of the world have such high income tax levels but the repayments are based on gross salary.....

if everything does go wrong, it would arguably be better to have the money in your savings account rather than paid off against the loan. even if everything devalues, something is better than nothing. if you already have considerable savings, then perhaps this won't be an issue, but the current unpredictability makes me lean even more to just paying the minimum. the biggest fear may well be job loss, so no repayments to make and savings would be vital.