10k - pay off student debt or save in some way?

Hammerhead17

Wow - thanks for the responses everyone. I thought nobody had replied as I didn't get any notifications (new to this. I'm in my late twenties but not really interacted much with forums before).

So (unless I decide to further my degree) I will expect to pay off the loan within 13/14 years (possibly more if I add in a few maternity leaves).

However, my next conundrum/thought was whether or not I continue my studies. My current Year 1 education contains a mishmash of subjects - personal finance, IT, french and business. Ideally I'd want to turn it into a valuable degree to help me with my job long term - I work in IT Business management. My options are:

1. Continue with the open university and switch to a business management degree (which would use 2 of the modules I've already done). I would need to fund this via a student loan.
2. Write a proposal for my work to sign me up for a chartered management apprenticeship degree - this is paid for by the company using money that would be given to the government if not spent on apprenticeships so effectively they're no worse off (google 'apprenticeship levy').

Trouble is, I was one of those who went to work at 18 and I feel I've done well as a result. I'm not 100% sure degrees are necessary at this point. The main reason I can think of is that I *might* get better at my job and will have the degree kudos to put on my CV if/when I need to look for a higher level job in the future.

The way I'm leaning at the moment is to:
- Set aside the money to pay off the loan in an easy access saver
- Put the rest in a fixed term ISA
- Write my proposal for the degree through work (asking for support from mentors to convince my manager - she's the only one who's not eager for me to do it as she's concerned about the 20% of working time on the job. Training and HR are very keen)
IF I don't get the degree approved through work, then sign up for the business management degree through OU directly. At which point I would not pay back the loan in full because I would have a significantly higher chunk of student debt. I'm the primary breadwinner in my relationship and that's the expectation for our future so I feel I should plan for long term growth in work, I just need to be sure that the degree will provide me the value I am looking for.

I wouldn't put any of the money in stocks and shares anyway as it is effectively my emergency fund. I believe you need to keep some for a rainy day before you start investing in stocks and shares.

So much to think about but I think the general gist is that it's definitely worth paying off if I don't increase my debt and don't have anything else major to pay for in the next few years.

Thanks everyone!

elephantrosie

i really think you should pay off yr student loan first. at 6% pa.....

Mr.Saver

20SmthngSver wrote: »

I personally wouldn't invest while having a mortgage, provided you even have spare money to invest when paying a mortgage on low income. I'd want that liability repaid and then have money spare to do as I like.

Interestingly, I would do exactly the opposite.

Currently, the best interest rate on 5 years fixed mortgage is around 2% (80% LTV). Investment return on equities is much higher than that. I will definitely borrow to invest if I can afford to repay the mortgage from my non-investment income (e.g.: salary) in the forceable future. In 25 years time (pretty common for a mortgage), the chance for me to be worse off is extremely small. Of course, no bank would lend to me at 2% if I had already own the property outright. I can only get a mortgage with high LTV and low interest rate, and then invest my spare income instead of overpaying the mortgage.

shinytop

Isn't borrowing money to invest something mainly done by professionals who aren't risking their own money/assets? If it were that easy and risk free then everybody would be doing it. And what if you lose the ability to pay back the loan (i.e. your job) and the investment has tanked?

atush

If you invest rather than paying the mtg, it isnt exactly like borrowing to invest. You are investing from income rather than savings or borrowing.

But you really need to do an evaluation between average investment gains, and the rate of your mtg. Mine was 1.25% before it just ended. That is very different from the 3-5% that some pay.