📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Is it worth paying off my plan 2 student loan loan with some of my mortgage overpayment?

Options
IAMIAM
IAMIAM Posts: 1,366 Forumite
Fifth Anniversary 500 Posts Name Dropper
Have 15k saved, was going to pay off some of my mortgage but now thinking is it wise to pay of my plan 2 loan?

I owe 10k, earn around 50k and have ended up paying the maximum interest every year for the last 2/3. 

I am thinking the extra 170 a month would come in handy and the mortgage interest rate of 3% is going to be much cheaper than 7.2%! 

Or is it wise to carry on as is and let PAYE take care of it over the next 5/7 years. Thoughts....

Comments

  • kaMelo
    kaMelo Posts: 2,863 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    edited 7 August 2022 at 12:24PM
    Without knowing exact figures it's impossible to say and even then it's not black and white.. 
    It is possible to never pay it off entirely but pay more back by letting it run it's course when compared with paying off the whole lump now. The downside to paying off in a lump sum is that you need a lump sum to do so and don't have the benefit of using the lump sum for something else.

    Only you know your future earnings potential and how long to go before the student loan is written off. Do the maths and work out which option is beneficial to you.

Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.2K Banking & Borrowing
  • 253.2K Reduce Debt & Boost Income
  • 453.7K Spending & Discounts
  • 244.2K Work, Benefits & Business
  • 599.3K Mortgages, Homes & Bills
  • 177K Life & Family
  • 257.6K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.