Paying student loan by direct debit

Matt123

Hi,

Has anyone done this to complete paying off their student loan? I've seen that it is an option now if you are in your final two years, which I should be after the next statement. What I cannot seem to find out is how much you pay by DD, can you negotiate in any way or is it just an average of recent payments, any ideas?

I should pay my loan off by next April, but currently I am getting various expenses reimbursed through payroll, and student loan is taking 9% of that grossed up amount, could DD be a way around that?

Poolie

Matt123 wrote: »

Hi,

Has anyone done this to complete paying off their student loan? I've seen that it is an option now if you are in your final two years, which I should be after the next statement. What I cannot seem to find out is how much you pay by DD, can you negotiate in any way or is it just an average of recent payments, any ideas?

I should pay my loan off by next April, but currently I am getting various expenses reimbursed through payroll, and student loan is taking 9% of that grossed up amount, could DD be a way around that?

If you think you are close, given SLC a call with all the payments from your payslip since the last full statement, which should mean April 2012 till March 2013 (if you have had your payslip yet). They will be able to tell if you are eligible for the scheme.

I recently did this as I am within the period and it worked out to be £44 per month more than my current repayments (interest rate depending) and that would run for 18 months. I know you can do up to 24 months which will obviously reduce the repayments, but I was happy since it means I have a final end date for my loan.

The direct debit does not take into account what you have paid previously, it is literally number of months / balance + monthly interest to work out the monthly direct debit.

In my case, it finally means any bonus will not be impacted by the student loan repayment so I could pay more off but this would reduce the term and not the monthly repayment amount.

Matt123

Thanks for the reply. That is what I was hoping for really, if I could spread the final payments out over 24 months rather than 12 that would be great.

Poolie

Matt123 wrote: »

Thanks for the reply. That is what I was hoping for really, if I could spread the final payments out over 24 months rather than 12 that would be great.

You can ask for it to be done over a shorter period if you wish, I went with 18 months as it was the best for me.