Approaching end of student loan term

greensalad

Hello,

I am on Plan 1, graduated in 2014 with around £26k. 

I currently have an outstanding balance of £3,720.38. 1.1% interest. 

Recently SLC have begun contacting me asking me to arrange payment direct with them because I am at risk of overpaying. My OH had the same issue (he was paying based on dividend income not having it deducted though, as he was a contractor at the time) and did indeed overpay and it was a bit of a pain to get it paid back.

Problem is based on my own calculations I will not repay it until April 2023. I currently pay a minimum of £256.27 per month based on salary, but I work a lot of variable overtime and often repay more. I also got a bonus last year in October which significantly reduced my loan. I do not think I will get one this year (or if I do it will be very small in comparison to last year's).

My question is; if I call SLC what will they do? Presumably they want me to make a fixed monthly DD instead of deducting from my paycheque. I don't want to pay more than I need to per month. Having just bought a home in need of renovation I need every penny I can get, and the interest due on my balance will cost me circa £26 between now and my final repayment if I only pay off the lowest amount I must, so I am not particularly concerned with getting it paid off early. 

What should I do? Wait until I have less than a year's amount of repayments left and then move to paying direct? I suspect the calculation they have is for my last year's P60 which was a fair bit higher than I think it will be this year.

silvercar

Just wait until you are nearer to clearing the balance. Then set up a DD. Make a diary not to look at it towards the end of 2022.