To pay off my student loans?

m4matteo

Hello All,

I'm very confused if I should think about paying off 1 or both of my student plans, despite watching and reading Martins advice. I think this is because I'm considered a higher earner. I'm 43yrs old and think I may pay some of it off before I retire, especially as I expected to be promoted in the next few years..

Both plans are 4.3% currently

Plan 1 - £5330.41 left (paid off £147 this year)
Plan 2 - £20565 left (paid off £1780 this year)

I still have a large mortgage and no savings. Is it worth clearing in the long run? I thinking maybe I should consider plan 2 but could anyone give some advise? I've used interest free credit cards in the past, is there potentially a clear work round here also?

Thanks

Matt

GrumpyDil

What makes you think it would be worthwhile paying it off?

What's your current earnings and what do you expect to earn after your increase?

littlegreen

Interest on savings is typically still higher than 4.3% at present, so personally I would put all extra money into savings at present. When interest rates drop I'd then be paying off the highest debt (including mortgage over repayment). How does your mortgage interest rate compare? I'd also make sure I had an emergency fund before making any extra repayments on anything.

 But with student loans you really do need to be confident you are very likely to pay them off within the repayment plans timeline to see any benefit of paying them off early. There are many calculators online that can help with this. Of course some of this is guess work, you do not know what will happen in your career.

silvercar

If you have a large mortgage and no savings, the first thing I would be doing is building up some rainy day money in a savings account! The last thing you need is to have some crisis in your home or to your income and have no money to deal with it.