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Student loan to pay off loan

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Hi All,

I have a quick question, I have an outstanding loan of £561 with interest of around 22%, I have just received my maintenance loan from Student Finance of £944. which I was going to just throw into a savings account.
Do you think it will be advisable to use the maintenance loan to pay of the other loan and take the early repayment hit? or should i just continue to pay £142pm until its paid off?

Thanks

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  • masonic
    masonic Posts: 23,543 Forumite
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    That depends on whether the "early repayment hit" is going to amount to more than the interest payable over the remainder of the loan term minus the interest you could earn from the money in a bank account.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    tyster wrote: »
    Hi All,

    I have a quick question, I have an outstanding loan of £561 with interest of around 22%, I have just received my maintenance loan from Student Finance of £944. which I was going to just throw into a savings account.
    Do you think it will be advisable to use the maintenance loan to pay of the other loan and take the early repayment hit? or should i just continue to pay £142pm until its paid off?

    Thanks

    usually yes
    who is the loan with?
    sometimes better to pay most of it but let that final amount be paid by the DD (i.e. pay off 561-142)
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