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Student loan - repayments not clearing anything, interest causing debt to rise
housebuyer7
Posts: 206 Forumite
Is this right? I am on repayment plan 2. I earn £43,000 per year. My repayments are not clearing the debt and instead interest is just getting added and added.
Two years ago in September 2022, when I was probably earning ~£40,000 or a bit less, the debt was £33,929.44. Now today I have taken a look, November 2024, and the debt is £36,176.15.
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Comments
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You are currently paying less than the annual interest.
Those are the interest rates applied to your loan.
https://www.gov.uk/guidance/how-interest-is-calculated-plan-2
Your repayments are 9% on income above £27,295.
The interest is higher than the repayments, hence the increasing loan balance.0 -
Thank you!0
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Just a reminder this topic was covered on Money Box today.
https://www.bbc.co.uk/programmes/b006qjnv/episodes/guideFree thinker.:cool:1
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