Student Loan nonsense

Gammon107

I am close to paying off my Student Loan. A couple more monthly payments and I'm clear of it. However, I am due a bonus which could be paid any time in the next 3 months for an as-yet undetermined amount. Not wanting to overpay the loan, I called them to settle the balance by card and ask for a 'Stop Notification' to be sent to my employer.

The lady told me that the stop notification would take 28 days, probably longer, to get to my employer and that therefore, no matter if I pay it early or let the payments continue, whenever I do settle the loan I am forced to make an overpayment and then claim that instalment back. This is because the 28 days it takes to notify my employer after my final payment does not reach them by the next payroll cutoff.

Surely this can't be right? Or acceptable? I've lodged a complaint with them; this is not the approach of a responsible lender. I'm trying to manage my affairs sensibly and they are refusing to let me do so.

Any comments/previous experience would be welcomed.

Poolie

This is correct, your employer has up to 28 days to action the stop notification and therefore you will have overpaid your loan. It all depends on when your payroll is completed and the stop notification is actually received.

There is no point lodging a complaint as this is how the system operates. They did bring in a predictor to try and stop overpayment and finally the option to switch from PAYE repayments to the last 2 years by direct debit which would also avoid an overpayment.

Once the stop notice has been issued, send a letter confirming your bank details requesting the overpayment be returned with a copy of your payslips. They usually act on these fairly quickly so should not wait more than a couple of weeks. You will get any interest which is due at 1.5%

OMAR

I was the same...stop notice was actioned asap and I didn't pay anymore following the phone call

geegee1977

You have to bear in mind that the SLC do not process your monthly payments, HMRC do. They are then updated yearly months after the end of the tax year. The SLC cannot tell your employer to stop taking payments only HMRC can.

You could have prevented this by looking at your yearly statements and getting a direct debit payment plan setup a while back.

somethingcorporate

I agree with the rest, you could have easily avoided this happening by setting up a DD. They wrote to me to encourage me to to do just this to avoid overpaying giving how the system works.