Student Loans and Inflation...

James3D

Hi there,

I read the helpful article on should I pay off my loans.

I dont earn quite enought to have to start paying them off after 9 YEARS! (pretty sad!, lol).

This is partly due to running my own small business which does not bring in a sizeable income so far and investing earnings into it as well.

I owe about 6K.

However, now with rumblings and rumours regarding inflation in the economy, should I be worried? Even if the interest rate for the loans goes up,
will it always be the same as what I borrowed in contrast to cost of living?
Should I be worried if inflations jumps massively to early 90s rates?
What happens if the government changes the rate they measure the rate of inflation?

Or should I try to at least pay the interest off each year to reduce the loan in real terms?

As my business didnt go well, I am considering emigration so will probably not earn a massive amount abroad to begin with.

Any help here would be great thanks!

frivolous_fay

The way I look at it... until I reach the threshold to start paying it off (yeah yeah, 9 years here too, and probably a similar debt to yours) as long as my savings are gaining more than the loan is incurring in interest, and the loan's at a lower rate than my mortgage, I'm not going to start paying it off voluntarily.

It's the cheapest loan you'll ever get... so I wouldn't rush to pay it off until you have to.