Hi all,
I’m hoping for some advice on whether I should pay off my postgraduate loan or hang onto my savings.
I currently have a Plan 1 student loan which I repay at around £91/month. I’ve recently started paying off a postgraduate loan too, which is an additional £85/month. The interest rate on the postgraduate loan is 7.3%.
I happen to have £4,000 in savings, which would completely clear the postgrad loan. But here’s the dilemma: if I pay it off, I’d be left with no emergency fund at all. We’ve just gone from a double to a single income household, so I’m understandably nervous about having nothing to fall back on.
On one hand, the interest rate is high, and clearing the loan would free up £85/month. On the other hand, I know the importance of having a safety net — especially right now.
Would love to hear what others would do in this situation — pay it off or keep the buffer?
Thanks in advance!
