What to do about my student loan?

Sunshine22_2

Hi all
I'm seeking opinions on this! I have no consumer debt nor mortgage (my partner owns the home we live in outright). I am currently saving for a property that will be rented out, although I want to pay cash so this is a long savings journey. I still also have about £11k in student loan debt. Should I pay this off prior to saving as my interest on the loan is higher than my savings interest! , I have some money in savings already which is essentially my emergency fund.

Thanks
Sx

roadsidecamper

Is it a private student loan, as in not from the Student Loans Company? My SLC loan only accrues interest in line with inflation, so I've all but forgotten about it and certainly wouldn't pay it off before saving anything!

dionysia

People who took out SLC loans in the last few years can have quite high rates. How quickly are you due to pay off the loan on the automated payments, and how quickly do you think you could pay it off if overpaying? I think it's worth seriously considering paying off early, just because it's pretty inflexible to have the automated deduction at source (assuming you're employed and paying tax under PAYE). I would talk to Student Loan Repayments about it and make sure you understand how/when interest is added and what the options are and how they would affect the interest (e.g. overpaying every month or a lump sum once a year; the latter would be good because then you have the savings and then just need to decide regularly whether and how much to pay off).

Of course you could always split the difference and, out of whatever amount you have available, save half and overpay half. I would put together a decent slush fund first. (Without wishing to sound gloomy, especially keeping enough on hand to set yourself up if your relationship broke down and you had to leave your partner's home.)