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Early student loan repayment?
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cheesetax
Posts: 5 Forumite
Hi everyone. 23yo with 2 student loans (plan 2 and postgrad). Plan 2 loan is chunky, would never ever pay it back in full. Considering repaying my postgrad loan early. Had already repaid ~£5500 off it as was concerned with interest accumulating and I had money in savings. Not sure if this was a poor decision in retrospect, but I remember that I did some quick maths that estimated I'd pay it off during the loan term. I do have the money in savings to pay the remaining off right now (£6700) if it is 'worth it'. Stable graduate job, £32k salary, money in savings. What do you think?
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Comments
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That knowing the interest rate on the postgrad loan would be useful.0
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Sorry - currently 7.3%. It is scheduled to revert back to RPI + 3% from December. Repayment is currently 6% of income above £21k.0
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Have you read the main MSE article?cheesetax said:What do you think?
N. Hampshire, he/him. Octopus Intelligent Go elec & Tracker gas / Vodafone BB / iD mobile. Ripple Kirk Hill member.
2.72kWp PV facing SSW installed Jan 2012. 11 x 247w panels, 3.6kw inverter. 34 MWh generated, long-term average 2.6 Os.Not exactly back from my break, but dipping in and out of the forum.Ofgem cap table, Ofgem cap explainer. Economy 7 cap explainer. Gas vs E7 vs peak elec heating costs, Best kettle!1 -
Yes, though most of the main MSE stuff is focussed on undergraduate loans where the decision is often a lot more straight-cut - ie because the loan amount is larger, the repayment threshold is higher. These postgrad loans are on top of the undergrad ones, making decisions more complex, and of course of lower amounts (max borrowing is less than £12k) and a much lower repayment threshold. So much unknown around if the government change thresholds etc too. Feeling a bit stuck...0
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Not sure the retirement board is the best one for a 23 year old with student loan questions. Maybe a board guide could kindly move to a more appropriate one?Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!1
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Have requested it - can't do it myself anymoreI’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.1 -
Probably on a remaining loan of that size the psychological aspect is the main thing. Would you feel better if you got rid of it?As long as you will still have an emergency fund, and perhaps see your employment future moving towards higher salary it may be a 50:50 decision, particularly if RPI remains higher for longer.0
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