Student Loan

billchecker1

I am in a position where I will be applying for a mortgage soon. I have had one previously.

When looking at affordibility calculators they ask about loans. Now I havent had a bank loan since October 2012 which I settled earlier (downgraded my car to clear the debt and get a higher deposit amount).

I do however have a student loan which I have a year left on. Does this count as a loan payment?

It does show on my payslip but not sure if this counts as a loan. I can get a letter showing this from the SLC.


I actually have the funds to pay off but with the interest being a mere 1.5% (with it being in a 4% savings account) it pays not to.

Thanks

hamster2013

a student loan is indeed a loan
you would need to declare it - as it is a financial obligation hitting your affordability.

cheers

Bufger

I remember when applying I did have to declare mine. I also remember them saying that they take very little notice of Student loans as they are such a low percentage and come out of gross pay.

Still you need to declare EVERYTHING. You wouldnt want your documentation to be invalid at the worst possible time.

billchecker1

Absolutley. I agree.

I wouldnt think of not declaring it. In any case its on my payslip in black and white.

My only consideration then is paying it off. I really dont want to due to the low interest rate, however if it reduces the amount they will lend or it affects affordibility then im not sure.

Does anyone have any advice>?

CLAPTON

Bufger wrote: »

I remember when applying I did have to declare mine. I also remember them saying that they take very little notice of Student loans as they are such a low percentage and come out of gross pay.

Still you need to declare EVERYTHING. You wouldnt want your documentation to be invalid at the worst possible time.

I'm not sure it makes any difference to applying for loans but
student loans are paid after tax and NI have been deducted.

olly300

Student loans count as a commitment i.e. outgoings like council tax and travel expenses, but they don't count as loans in the same sense as having a massive bank overdraft or car loan.

So you need to declare it but they won't add it to the other borrowings column.

billchecker1

olly300 wrote: »

Student loans count as a commitment i.e. outgoings like council tax and travel expenses, but they don't count as loans in the same sense as having a massive bank overdraft or car loan.

So you need to declare it but they won't add it to the other borrowings column.

Does this mean it wont affect the amount they will lend?

In which case I wont pay it off.

Thanks

Jat1

It does affect how much you can borrow.. Some draft calculations saw us being lent 15k less.