Is it really not worthwhile to pay off student loans in bulk?

thatguyoverthere

The recommendation from the main site is not to do this. That it is more economically advantageous to put your money into an account with a high rate of interest, earn 4% interest vs your loan gaining 1.5% interest.
Logical.

However....In my situation I don't think I can get any of these high interest accounts.
A few months ago I started a new contract based entirely in Switzerland where I've been on and off living with my Swiss-miss for the last 2 years.
To be eligible for all of these high interest accounts you have to be a UK resident.

Switzerland... well it's central bank interest rate is -0.75. My bank account is earning something ridiculous like 0.01% interest and I can't find any way to earn a higher rate.

Given the post brexit collapse of the pound and the very favourable exchange rates I'm seriously thinking of repaying all my student loan.
I'm not sure how much I have left, though it will be less than 10k.

So....
Does this sound like a good idea?
Is there any extra charge with repaying my loan in one or if it says the remaining balance is 8888 then I only pay 8888?

Lokolo

There is an additional charge if you pay it off via a credit card, other than that no there isn't.

You can see and calculate how much you have left http://www.studentloanrepayment.co.uk/

Voyager2002

You could probably earn about 4 per cent from a bundle of shares, albeit with an element of risk. Another factor is that at some point you may need a decent sum of money for something like a deposit to buy a home, and if this is likely to happen you might want to hold on to the money that could repay your student loan.

thatguyoverthere

Yeah, I've been meaning to figure out shares and such things. But from what I've seen the cost to buy them is more than I'd earn having them even assuming they do well so I'm having to look into something else.
Not planning to buy a house for years to come, so for now my money is just sitting around looking pretty.
Anyway.
That's another issue, trying to get the loans thing sorted for now.

Lokolo wrote: »

There is an additional charge if you pay it off via a credit card, other than that no there isn't.

You can see and calculate how much you have left

So I can use my regular barclays visa debit and it'll just be a flat what I see is what I pay then the student loans people will leave me alone forever more?

Voyager2002

thatguyoverthere wrote: »

Yeah, I've been meaning to figure out shares and such things. But from what I've seen the cost to buy them is more than I'd earn having them even assuming they do well so I'm having to look into something else.

Probably not true: most people in your situation would use "collective investments" such as Unit Trusts / Funds where you benefit from economies of scale... Going down this route is likely to be worthwhile if you have more than about ten grand available.

System

Have you considered investing in a fund?

mandySaver12

@MatthewAinsworth is right. Funds often have 0% initial investment and maybe £80 min investment at most.
Worth nothing that fund investments can go down as well as up. Given your situation if i was you I would be paying off some of my student loan because:
1. You earn in CHF and GBP is weak
2. Negative CHF interest rates (It's really the reverse of the argument stated on the MSE forums for you...)
3. Not too sure how easy it would be for you to set up a UK based investment account in your name given you're not UK based

Jimmithecat

If your student loan is running along at 4% interest I really do not see why you would not make the most of this window of opportunity and pay it off - then whatever investments/mortgage you take on in the future you are starting off with a clean slate.
I disagree with mse on very little - but holding onto student debt when you have the option to pay it off - i don't agree on....

agrinnall

If you never need that money for anything else then yes, paying off the remaining student loan may be a good idea. But if, for instance, you intend to buy a property in the next few years then putting the money towards the deposit may be a much better use for it.

Tabbytabbitha

Don't forget that if you were made redundant, became ill or disabled or wanted to take time off to travel or bring up children you wouldn't need to make any repayments but once you've paid it off you no longer have access to the money.

System

Most people would never pay back what they borrowed under the minimum payments anyway