wanting to pay of student loan with savings??

gandalfsbeard

Hello I just wondered if anyone could be of help please. I opened a savings account with icici (HiSave 6.41%) not so long ago. I was going to put £1,000 in to begin saving but i read martins piece about not bothering to save if you have debts... Then he mentioned how you can use your savings to pay your debts off but it all sounds rather confusing to me. I have about £4,500 of student loan debt to pay off but of course this will grow with interest. I finished my degree in summer 07. I'm not entirely sure how to go about paying this off using my savings... I would be grateful for any pointers in the right direction. Cheers very much

Aegis

The interest on your student loans will probably not be as much as the interest you'll make by saving your money. You might want to consider holding on for a while before paying the loan back.

dreamalittle

There's an article by Martin all about this topic which you should have a look at:

http://www.moneysavingexpert.com/loans/student-loans-repay

Mikeyorks

gandalfsbeard wrote: »

I'm not entirely sure how to go about paying this off using my savings... I would be grateful for any pointers in the right direction.

You can pay lump sums direct to the SLC ... over and above anything you may be paying monthly via PAYE.

But .. as earlier advice I would wait and see the RPI figure for March before deciding which way to jump. If, as appears likely, it's below the 4.8% for last year ... you may be better whittling the loan away via PAYE, and saving a bit.

http://www.incomesdata.co.uk/statistics/rpitable.htm