Should I pay off my advanced learner loan

dainna88

I currently owe 2700 for an advanced learner loan I was miss sold in 2015 should I pay off the balance as the interest rates are high or is there any way I can get it written off ? 

Ed-1

dainna88 said:

I currently owe 2700 for an advanced learner loan I was miss sold in 2015 should I pay off the balance as the interest rates are high or is there any way I can get it written off ? 

If you take out a student loan for a degree course the advanced learner loan is written off.

dainna88

I am not in a position to do my degree as I am applying for a mortgage the savings I have are for my deposit but I’m unsure if I should use some of it to pay of the student loan as the  interest has gone up and they take payments each month from my wage. 

Ed-1

dainna88 said:

I am not in a position to do my degree as I am applying for a mortgage the savings I have are for my deposit but I’m unsure if I should use some of it to pay of the student loan as the  interest has gone up and they take payments each month from my wage. 

Well it depends on whether you intend on taking out student loans in the future.

The advanced learner loan is a plan 2 loan so gets written off after 30 years if not repaid sooner, or if you take out student loans for a degree course.

If you intend to take out further student loans for a degree course it would obviously be a waste to pay it off as it would otherwise be paid off for you by the Government. If you absolutely definitely won't take out further student loans (and look up the LLE which is coming in for 2025 which will allow loans to be taken out for individual modules from 2027) then by all means pay off the ALL. The repayment threshold for plan 2 loans is quite high at £27,295 so that's another consideration. If you won't earn above it you won't have to pay anything anyway.

dainna88

Thank you for your reply. I do not intend to take out any more student loans as I wouldn’t be able to study and afford my mortgage payments I currently earn just over the threshold and will continue to do so I think it’s looking like I will have to pay the ALL in full or it will keep accumulating interest and pay a lot more in the long term which is really unfair but doesn’t seem to be any other way around it.

silvercar

dainna88 said:

Thank you for your reply. I do not intend to take out any more student loans as I wouldn’t be able to study and afford my mortgage payments I currently earn just over the threshold and will continue to do so I think it’s looking like I will have to pay the ALL in full or it will keep accumulating interest and pay a lot more in the long term which is really unfair but doesn’t seem to be any other way around it.

Sounds like your monthly loan repayments are small, you need to calculate how much you would have paid in total before the loan is written off. Compare that to the cost of clearing it now. Eg if you are only paying £10 a month and write off won’t be for 20 years, you will have paid £2400 in total. If that is still less than the cost to repay the loan now, then you would be better off not paying off the loan.

dainna88

My payments vary but are never as low as £10 a month usually take between £30-£80 per month from my wages