Student Loan Interest and Repayment

Legacy_user

I am trying to build a model in Excel to work out my current student loan position and would be grateful for some help on the following.

INTEREST CALCULATION

I cannot quite model this properly - is the interest calculated on a daily basis and then compounded

e.g. if you owe £10,000 daily interest rate is 0.005% = 50p. So the next day will be calculated on £10,000.50 at 0.005% etc etc or is it more complex?

REPAYMENTS

I know that at the Tax Year End the SLC are told how much you have paid in the year and they then work out the interest if you had paid the money each month.

Is there a standard calculation e.g. they divide your payment by 12 and then assume a set date each month it was paid e.g. 1st of the month,

Mnay thanks

cannycat

Hi, I can't help you with the "how the interest is calculated" question but I can tell you that if you don't keep an eye on your payments you may well end up overpaying for about a year! Which happened to me and several friends a couple of years ago - the problem is that it takes the tax office a year for its records to catch up.

Meant a nice lump sum eventually, but it was money I really could have done with at the time. Do keep a record of ALL payments you make as I found that the SLC and the tax office were completely useless at talking to each other - I had to send copies of all my payments and pay slips before they'd believe me... Of course, it could have improved in the years between given all the government's fantastic new computer systems. *cough*. Good luck!

Tirian

I can assure you that things have not improved at all upon the situation detailed above. I have had exactly the same problems (although I'm not yet in the happy position of being able to overpay as I'm nowhere near clearing mine yet!!)