Should I take full student loan and then invest?

Karlotti

Good evening!

i'm returning to university in September 2014, and would like some advice concerning investing my student loan.

I'm very lucky - I will be given a non-repayable bursary of £20,000, as well as a non-repayable maintenance grant of approx. £3,387. I'll be starting with a relatively healthy current account too. As I'm also applying for a tuition fee loan, I'll have plenty to live on.

I have also applied for a repayable student loan and have been told I will be paid £4,282. My question is - shall I take this student loan to invest it in my 1.55% ISA? (Not the best rate, but it suits my needs the best and am always looking for a better rate)

I'm not entirely sure of what the interest rate will be from September 2014 onwards - the MSE page says it will be 6.3%...

The GOV.UK website says it will be the current interest rate plus 3%...

And then the Student Loan Compant website is simply very confusing...

My conclusion is that I would be paying more than 6% interest on this student loan. As my ISA is only giving me 1.55% interest, there is no point taking the loan, is there?

Thanks for your advice.
Kind regards,
KT

building_with_lego

Wouldn't you be better off just investing as much of your bursary as possible? I don't understand why you'd want to take an unnecessary loan when you've got over £23k of free money coming your way!

Work out how much you actually need from each bursary payment and grant payment and stash the rest.


I've got a smaller bursary and maintenance grant due and have taken the loan for fees. I'm putting all the spare cash, including most of my overdraft money, into my 123 current account for 3% interest (non-taxpayer atm). Still wouldn't be worth taking a maintenance loan with the interest rates as they are.