Pay of Student load or start saving!

steveh2001

This is 1/2 and 1/2 for savings or the student section but i hope no one minds ;-)

THe question is - i am jobhunting at the mo - just finished uni. Ive just read Martins Money fountain article and that was the same conclusion i had drawn from other posts, i.e. Isa > reg saver > websaver. But - i have 1 student loan around £3695 with a lot of interested added on. Would it be more benificial to pay of the loan in 1 go - or a few £K at a time before putting my assets in an Isa, thus paying off my debts - or to let it come out the wages when i hopefully find a job?

Cheers

isasmurf

This has been raised a few times. Here is a link to a discussion on it earlier in the year. Most of what is in there still stands.

Generally, because the interest rate is linked to the RPI it tends to be one of the lowest interest rates you can get on loans, and if you can save in an ISA then it is usually best to go down that route as you will earn more interest in an ISA than you would be paying on your loan.

The interest you pay on your student loan is 3.2% from 1st September 2005 to 31st August 2006.

steveh2001

Thanks for the info isasmurf! Sorry i didnt see the earlier post. Ill leave the loan as it is then ;-)

HGLTsuperstar

If that's all you have on your loan, think yourself lucky, pay the minimum each month, and put the rest in an ISA. If you want to pay a lump sum off your loan wait until just before the end of the financial year, i.e. around end of March, as that's when the SLC pay HMRC, the rest of the year they sit on your money earning interest that you could have instead.

steveh2001

Well thats what the loan was before interest - its got a couple of hundered on top with interest now. Well if im effectivly getting more interest in savings/investments and isas i wont pay off any bulk amounts - just let it come out my wages,

Cheers