Student Loan Overpayment

silvercar

94Gallio said:

If my annual salary is consistently above the repayment threshold for Plan 2 and I get a performance bonus once a year, is it likely that I’ve overpaid in the month that the bonus is paid each year as there will be an assumption I’m earning that amount every month? If so, could I claim those overpayments back? Thanks in advance for any help/guidance.

If you earn over the threshold each month, then a bonus will have the repayment taken from it as 9% of the total bonus. When you look at the year as a whole it will be correct - 9% of everything over the threshold. They won't make any assumptions for future months, as it is calculated on a month by month basis.

The time when it causes extra payments is if you earn under the threshold each month. Then in bonus month they take 9% of everything over the threshold and because you can't claim any refund once you hit the threshold for the year, you have paid more than 9% of everything over the threshold on an annual basis. So you lose out, as an overpayment you can't get back of 9% of the difference between your pay and the threshold on each month you are under the threshold. But this isn't the case for you.

TL:DR - your fine, it will be correct.

fiferanger

Hi All,


First time poster looking for advice on my student loan ( sorry if this isn't the right place).

So I took out a student loan between 2011-2013, it was for around £7250 and I am currently on plan 4, I've recently went to to check how much I've paid back and I was shocked to see what my repayments have been going.

So I've paid about £3000 and more than half of that has went to interest. The last tax year alone, I paid £600 back but within the same year £300 worth of interest was added.

I've been fortunate that I've started to make a bit more money and will wage will continue to rise and thus the full amount will be paid off well before the cut off date. So I could end up paying £13/14k.

Now my question is, should I use a 0% credit card to pay this off and then pay the credit card off saving myself thousands? 


I know under normal circumstances this would be considered a bad idea but I think my situation is different, if I put this on a credit card I could have it paid off in under 3 years but keeping it as is it would be about 5 and be for a lot more.


I am aware of the benefits of keeping it as is like it not affecting you credit score and also the security of it if I was to lose my job but I just feel I sick seeing such high interest payments, really do feel I was 'miss sold'  on it at the time.


Any advice would be greatly appreciated 


Thank you 

silvercar

If you don’t need the money for anything else, then paying it off if you are confident you would otherwise pay it off in full over a few more years does make sense. But (a) be confident you will be paying it off in full (b) you wouldn’t get a better return elsewhere eg a regular savings account or investment (c) you couldn’t put the money to better use in a pension or home deposit.