I am seeking some advice to understand how the repayments for my student loan plan 2 work exactly. I graduated in 2015 December. At the moment the way I understand it works is that every month government deducts 9% of the amount that is over the threshold amount of what I earn in a year( which has changed in the last year). At the end of the financial year, the government sends the money to the Student Loan company that they have been collecting from me every month, which I also find it odd why they don't pay it right after they have taken my money. I didn't really pay attention before these payments before as it was automatically deducted from my salary.
But what I have noticed now is that the way they have designed it is that the interest on the loan accumulates a higher amount than my repayments in a year, and in the last three years the total loan amount has actually increased rather than decreased.
2016-2017 ....25300.49
2017-2018 ....25493.38
2018-2019 ....25658.78
Is that legally okay that they have done it that way? If someone is stuck on the same salary for the next 10 years, the loan would only increase every year. Technically they are charging interest on top of interest every year.
Also my interest rate has increased since my first payment month
- 30/04/2016 my interest rate was 1.69%
- then five months in 30/09/2016 it increased to 2.39%
- then 30//04/2017 it increased to 3.10%
- then 30/09/2017 it increased to 4.60%
- then 30/04/2018 it increased to 4.94%
- And lastly 30/09/2018 it increased to 5.14%.
- Statement for the last financial year is still to come through.
Why has this percentage changed like this?
Should I contact the Student Loan company to understand the increase behind the interest?
Can I increase the amount I pay every month? Can I actually increase it?
Any advice would be great.
I have attached some screenshots of the payments.
