Student loan overpayments

stripedbanana

Just saw the recent Martin Lewis chat on student loans that has got me thinking. I had a student loan (Scotland) for somewhere around £7000 in 2004. I only started paying this back through PAYE last year. However a number of years ago (10 or so) I started making voluntary payments of £30 a month, mainly because I was afraid of interest building forever. I have never changed the direct debit, and so now I'm making both the voluntary payment and the PAYE. Is this a good idea to just continue doing this to get rid of it faster, or was I stupid to start the direct debit payments in the first place? I'm not sure how much is outstanding now. Probably have 35+ years of work left in me.

GaryWhite

This is for the experts to answer as i am also looking forward to start doing same thing..

benten69

I would stop the over payments. The interest accrued on a student loan is next to nothing (inflation basically) and it gets written off after 30 years of graduating anyway, so for you that is 2034. Why over pay? You have absolutely nothing to gain from it at all.

That £30 a month is better off in your savings account.

tinag123

Hi there, I read about student loan overpayments whilst on maternity leave. I have been on Mat leave twice and had 2 student loans 1 from 1998 and one from 2002. I just called SLC and apparently my threshold is the £17000 odd from plan 1 and not the higher £21000 from my second loan. I am therefore over the threshold during my maternity leave but have still paid over the 9%, he said there would be no refund for overpayments over the 9% as over the threshold even though I have paid more than I should. Any ideas or is that just the way it is? Any help is much appreciated thanks

sheramber

This link explains how repayment is allocated when you have 2 loans

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678784&_dad=portal&_schema=PORTAL

How have you paid more than 9%? Your employer only deducts one 9% of your pay.

GaryWhite

Thanks for the link, it help out