Plan 2 Student Loan - £6.4k balance

LeapyUK

Hi,

my plan 2 student loan has gone from about £5,146 to now £6.4k from interest - which is now around £35/40 per month.

i pay £10 a month out of my wages but ive just gone to £34k salary.

is it worth me paying this off, because if I pay £10 per month from wage, times 12 months, times 30 years, that’s only around £3k I’d continue to pay which is less than the balance I owe now, or are there other implications I should be aware of (due to get a mortgage next year), I know it doesn’t affect credit score.

thanks in advance and I look forward to hearing some advice. 

silvercar

That £10 a month will go up with wage rises over the next 30 years, so you would expect to pay more in time. Though the interest on the loan will increase the loan.

The question is what else could you do with the lump sum if you don't put it towards the student loan? If you need it for a house deposit/ furniture/ future pension etc then I would keep it in a savings account until needed. Once paid off you can't get it back. If you put it in a savings account until needed you will get interest, which will balance against the interest you are charged on the loan.