Career Development Loan Repayment Question

sliceofcake · 21 October 2014 at 11:11PM

Hello! My apologies if this post is quite long.

My partner took out a career development loan for his postgraduate course last year. He has since finished the course and the interest and payments begin next month. He has (or will on pay day!) an income so it's time we started thinking about the repayment approach.

He took out the loan from Barclays on the repayment plan of 60 months, as we were worried he wouldn't have an income afterwards, so it would ease the worries for him to have lower repayments. As he will have money I was wondering which would be better for him:
1) to keep up with the regular payments, put money aside until he has saved the total of the loan and repay it in one go
2) to keep up with the regular payments and every time he saves a certain amount (£1000) he repays the chunk.

I read the contract and he is allowed to repay in separate partial payments in addition to the monthly payments. However, my boyfriend was convinced that repaying early will negatively impact his credit rating (as he will look less attractive to banks, as a person they cannot make as much money off of).
I used Barclay's online chat feature to see whether his concern was silly and they just said "you will be fine" rather than yes or no to whether it would be a negative impact.

Naturally our priority is to get my partner's credit rating as high as we can while paying as little extra interest as possible. Which way seems better to repay?

stator · 21 October 2014 at 11:35PM

As far as I am aware no-one treats repaying early as a bad thing, as long as it's inline with the T&Cs

thebritishbloke · 22 October 2014 at 3:09PM

Early repayments aren't a bad thing, I'd just make regular higher payments, so lets say your monthly payment at 60 months is £50, up it to £100 or whatever the most is that you can reasonably afford. I wouldn't wait until you've saved up X amount because then you're just letting more interest accrue on the loan.