Student loan at 1.5%? why am I paying 8%?

William_Mateless

Student loan taken out 2002, been paying back since started earning.
Just rec'd statement shows:
Debt at 15/4/2014 £21,055.97
Paid £32 for 2 mths, then £196 for 10mths.
Balance carried forward 5/4/15 = £19,334.77

This means that I have paid £652 in interest over the year??

Please help I am confused and want to know if I should pay it off asap?

pete-20-11

Have you got your sums right? From the above it looks like interest is 302.80 which is probably about right for 1.5%

bamgbost

Also you need to remember that each Student loan hasdifferent terms, depending on when it was first taken. And in turn they havedifferent interest rates.

You definitely sure yours is the 1.5% interest rate one?

CLAPTON

William_Mateless wrote: »

Student loan taken out 2002, been paying back since started earning.
Just rec'd statement shows:
Debt at 15/4/2014 £21,055.97
Paid £32 for 2 mths, then £196 for 10mths.
Balance carried forward 5/4/15 = £19,334.77

This means that I have paid £652 in interest over the year??

Please help I am confused and want to know if I should pay it off asap?

you started owing 21,055.97
you paid back 2 x 32 + 10 X 196 = 2024

and you now owe 19,334.77

reduction in debt is 21,055.97 - 19334.77 = 1721.20

so the interest was 2014 - 1721.20 = 292.80



so approximate interest rate is 292.20 / 20,000 = 1.46%

William_Mateless

how does it sound about right if just on that sum its is 3%?

William_Mateless

I see now, many thanks Clapton (no interest rates involved thankfully)

Pixie5740

In answer to your question about whether or not you should pay it off asap I would say don't.

1) It's the cheapest money you'll ever borrow and you should be able to achieve more than 1.5% net on extra money you can save at the moment.

2) If your circumstances change and your income drops then so will your student loan repayments. You won't get that with any other type of borrowing.

So just save any spare income you have.

pete-20-11

CLAPTON wrote: »

you started owing 21,055.97
you paid back 2 x 32 + 10 X 196 = 2024

and you now owe 19,334.77

reduction in debt is 21,055.97 - 19334.77 = 1721.20

so the interest was 2014 - 1721.20 = 292.80



so approximate interest rate is 292.20 / 20,000 = 1.46%

2014? Do you mean 2024?

CLAPTON

pete-20-11 wrote: »

2014? Do you mean 2024?

yes indeed, a typo
so 'interest would be about 304

and interest rate approx 304/20,000 = 1.52% approximately


actual interest rate is of course 1.5% but only really trying to address the posters concerns